Silicon Motion Technology

Another stock that's trading very close to triggering a major breakout trade is Silicon Motion Technology ( SIMO), which designs, develops and markets high-performance, low-power semiconductor solutions for the multimedia consumer electronics market. This stock is off to a slow start so far in 2012, with shares down by over 20%.

>>4 Tech Stocks to Trade (or Not)

If you look at the chart for Silicon Motion Technology, you'll see that this stock is just starting to exploded higher today by around 9%, as shares rip back above its 50-day moving average of $15.46 a share. This is already an impressive move, but an even larger breakout for SIMO is quickly setting up here. This move today is pushing SIMO within range of taking out some near-term overhead resistance levels.

Traders should now look for long-biased trades in SIMO if it can manage to break out above some near-term overhead resistance levels at $16.57 to $17.07 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 511,826 shares. If that breakout triggers soon, then SIMO could explode to the upside and re-test or take out its next significant overhead resistance levels at $19 to $22.20 a share.

One could look to buy SIMO off weakness as long as it's trending above its 50-day moving average of $15.46 a share with strong upside volume. One could also just buy off strength once SIMO clears $16.57 to $17.07 with volume and then simply use a stop that sits just below $16.57 a share.

If you liked this article you might like

3 Stocks Pushing The Drugs Industry Lower

Market News: Apple Inc, Vitae Pharmaceuticals, Alexza Pharmaceuticals

Why to Buy These 5 Under-$10 Stocks ASAP

5 Stocks Under $10 Set to Soar

7 Under-$10 Stocks Racing Higher