One chemical manufacturing player that's trading within range of a major breakout trade is Amyris ( AMRS). This company is building and applying its industrial synthetic biology platform to provide alternatives to petroleum-sourced products used in specialty chemical and transportation fuel markets worldwide. This stock has been hammered by the sellers so far in 2012 with shares off by more than 70%.

If you take a look at the chart for Amyris, you'll see that this stock was downtrending hard from its February high of $10.56 to a recent low of $1.57 a share. During that massive move lower, shares of Amyris have consistently made lower highs and lower lows, which is bearish technical price action.

That said, after hitting that low of $1.57, shares of Amyris have now started to reverse that downtrend and are now making higher lows and higher highs, which is bullish price action. That move has now pushed Amyris within range of triggering a major breakout trade.

Traders should now look for long-biased traders in AMRS if it can manage to trigger a break out above some near-term overhead resistance at $3.49 to $3.53, and then above $3.89 a share with high volume. Look for a sustained move or close above those levels with volume that registers near or above its three-month average action of 675,555 shares. If we get that action soon, then AMRS could make a monster move back toward its next significant overhead resistance levels of $6 to $6.69 a share.

One could be a buyer of AMRS off weakness and anticipate the breakout with a stop at around $3 a share. One could also buy off strength and get long once $3.49 is taken out with high volume. If you buy off strength, then I would use a stop that's a few percentage points below $3.49 a share. I would then add to either position once AMRS takes out $3.89 with strong volume.

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