One under-$10 stock that's within range of triggering a major breakout trade is Complete Genomics ( GNOM), a life sciences company that has developed and commercialized a DNA sequencing platform. This stock has traded virtually flat so far in 2012, with shares down around 1.7%. If you take a look at the chart for Complete Genomics, you'll see that this stock hit a near-term bottom in May at around $1.57 a share. After tagging that bottom, shares of GNOM have started to uptrend and make higher lows and higher highs, which is bullish technical price action. Also, during the last week we've seen heavy upside volume hit the chart for GNOM as the stock has risen from around $2 to its recent high of $3.34 a share. That move has now pushed GNOM within range of triggering a major near-term breakout trade. >>4 Biotech Stocks Suring on High Volume Market players should now look for long-biased trades in GNOM if it can manage to trigger a breakout trade above some near-term overhead resistance at $3.34 to $3.50 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 1.95 million shares. If that breakout hits soon, then GNOM has a great chance of re-testing and possibly taking out its next major overhead resistance levels at $4.53 to $5.42 a share. Keep in mind that a high-volume move over $3.34 will mean GNOM has pushed back above its 200-day moving average of $3.23 a share, which is technically bullish. If you like the setup here for GNOM here, then I would look to buy this stock off weakness and anticipate the breakout. I would use a stop near $2.50 a share, or possibly closer to the 50-day moving average of $2.09 if we get a bigger selloff soon. I would prefer to buy off strength once GNOM takes out $3.34 to $3.50 with heavy volume, and then simply use a stop right below the 200-day at $3.23 a share. Keep in mind that the current short interest as a percentage of the float for GNOM is rather high at 8%. This stock also has a ridiculously low tradable float of just 19.35 million shares. Any future breakout could easily trigger a monster short-squeeze, so keep this stock on your trading radar.
Complete Genomics (Nasdaq:GNOM) is trading at unusually high volume Tuesday with 5.6 million shares changing hands. It is currently at four times its average daily volume and trading down 23 cents (-7.7%).