TrovaGene

One under-$10 stock in the biotechnology and drugs complex that's trading very close to triggering a near-term breakout trade is TrovaGene ( TROV), a development stage molecular diagnostic company focused on developing and marketing urine-based nucleic acid tests for patient/disease screening and monitoring in the U.S. This stock has been smacked by the sellers so far in 2012, with shares down by over 25%.

If you take a look at the chart for TrovaGene, you'll notice that this stock formed a double-bottom chart pattern back in late August at around $2.11 to $2.09 a share. Following that bottom, shares of TROV have started to soar and move within range of triggering a near-term breakout trade. The recent spike which has pushed the stock above $2.70 a share has also moved TROV within range of taking out its 200-day moving average of $2.86 a share.

>>5 Technical Trades Under $10

Traders should now look for long-biased trades in TROV once it breaks out above some near-term overhead resistance at $2.86 a share with high volume. Look for a sustained move or close above $2.86 a share with volume that hits near or above its three-month average action of 56,492 shares. If that breakout triggers soon, TROV will have a great chance of re-testing or possibly taking out its next major overhead resistance levels at its 200-day moving average of $3.78 a share, or possibly even $4 to $4.24 a share.

Traders can now look to buy TROV off any weakness to anticipate that breakout and simply use a stop that sits just below some near-term support at $2.46 a share. One could also buy off strength once TROV takes out $2.86 a share with volume and then simply use that same stop below $2.46 a share.

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