One final under-$10 shipping player that looks ready to trigger a big breakout trade is
), which is involved in the seaborne transportation activities. This stock has been hit hard by the sellers so for in 2013, with shares off by 35%.
If you take a look at the chart for Diana Containerships, you'll notice that this stock recently formed a double bottom chart pattern at $3.57 to $3.61 a share. Following that bottom, shares of DCIX have started to uptrend and move back above its 50-day moving average at $3.91 a share. That move is quickly pushing shares of DCIX within range of triggering a big breakout trade above some key overhead resistance levels.
Traders should now look for long-biased trades in DCIX if it manages to break out above some near-term overhead resistance levels at $4 to $4.09 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average action of 338,266 shares. If that breakout triggers soon, then DCIX will set up to re-test or possibly take out its next major overhead resistance levels at $4.61 to $4.82 a share. Any high-volume move above those levels will then put its next major overhead resistance levels at $5 to $5.62 into range for shares of DCIX.
Traders can look to buy DCIX off weakness to anticipate that breakout and simply use a stop that sits right below some near-term support levels at $3.61 to $3.57 a share, or even $3.53 a share. One can also buy DCIX off strength once it clears those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.
To see more hot under-$10 equities, check out the
Stocks Under $10 Setting Up to Explode
portfolio on Stockpickr.
-- Written by Roberto Pedone in Delafield, Wis.
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