One final under-$10 biotechnology player that looks ready to trigger a near-term breakout trade is Idenix Pharmaceuticals ( IDIX), which is engaged in the discovery and development of drugs for the treatment of human viral diseases with operations in the U.S. and Europe. This stock has been in play with the bulls during the last six months, with shares up 16%
If you take a look at the chart for Idenix Pharmaceuticals, you'll notice that this stock has been uptrending strong for the last month, with shares soaring higher from its low of $2.93 to its recent high of $4.83 a share. During that uptrend, shares of IDIX have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of IDIX within range of triggering a near-term breakout trade.
Traders should now look for long-biased trades in IDIX if it manages to break out above some near-term overhead resistance at $4.83 a share with high volume. Look for a sustained move or close above that level with volume that hits near or above its three-month average action of 1.18 million shares. If that breakout triggers soon, then IDIX will set up to re-test or possibly take out its next major overhead resistance levels at $5.50 to its 52-week high at $5.93 a share. Any high-volume move above $5.93 will then give IDIX a chance to tag $7 a share.Traders can look to buy IDIX off weakness to anticipate that breakout and simply use a stop that sits right below its 200-day moving average at $4.25 a share, or below more key support at $4 a share. One can also buy IDIX off strength once it clears $4.83 a share 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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