One name under-$10 name in the biotechnology and drugs complex that's worth keeping on your trading radar is Targacept ( TRGT), which is engaged in the design, discovery and development of neuronal nicotinic receptor therapeutics for the treatment of diseases and disorders of the nervous system. The sellers have destroyed this stock in 2011, with shares off by 70%. If you take a look at the chart for Targacept, you'll see that this stock gapped down huge in November from $19.54 to under $8 a share. That gap down came on monster volume, which demonstrates that everyone who wanted out of this stock got out. Since that move, the stock has started to rebound and make higher lows and higher highs, which is bullish. Now the stock is setting up to breakout above some near-term overhead resistance levels, which if taken out, could spark a big move in this stock. Market players should now watch TRGT for a breakout trade if it can manage to clear and close above $7.80 to $8 a share on high-volume. Look for volume that tracks in close to or above its three-month average action of 867,956 shares. The stock hit $8.05 already today, so watch for a close near the daily highs on TRGT. Volume so far is decent with almost 300,000 shares traded. You could be a buyer of TRGT on any move or close above $7.80 to $8 on high volume. I would simply use a stop just below $7.52 or even tighter if you get long off strength. You could also buy off weakness with a mental stop just below $7.22. I would add to either position once TRGT takes out its gap down day high of $9.49 with volume. A move over $9.49 should set this stock up to fill some of that huge gap down from $19.54. This is another heavily shorted stock by the bears. The current short interest as a percentage of the float for TRGT is a rather large 12.7%. The bears have also been increasing their bets form the last reporting period by 15.4%, or by about 566,500 shares. Any move back into that gap should set off a monster short-squeeze for TRGT, so keep this name on your trading radar. Targacept shows up on a recent list of 10 Biotech Stocks Loved and Hated by the Pros.