Dehaier Medical Systems
One under-$10 health care player that's quickly moving within range of triggering a major breakout trade is Dehaier Medical Systems (DHRM), which, through its subsidiaries, develops and distributes medical devices and sleep respiratory and oxygen therapy products in the People's Republic of China. This stock has been red hot over the last six months, with shares up a whopping 141%.
If you take a look at the chart for Dehaier Medical Systems, you'll notice that this stock has been uptrending strong over the last three months and change, with shares moving higher from its low of $2 a share to its recent high of $4.80 a share. During that uptrend, shares of DHRM have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of DHRM within range of triggering a major breakout trade.
Traders should now look for long-biased trades in DHRM if it manages to break out above some near-term overhead resistance at $4.80 a share to its 52-week high a $4.85 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 volume of 104,479 shares. If that breakout triggers soon, then DHRM will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $6.50 to $7 a share.
Traders can look to buy DHRM off weakness to anticipate that breakout and simply use a stop that sits just below some key near-term support levels at $4.25 a share or around its 50-day moving average at $3.95 a share. One can also buy DHRM off strength once it starts to take out those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.