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DragonWave ( DRWI) is a producer of high-capacity packet microwave solutions which transmit voice, video and data over broadband connections. The principal application of DragonWave's products is wireless network backhaul. This stock is trading up 13% to $2.49 in recent trading.

Today's Range: $2.39-$2.72

52-Week Range: $2.05-$5.50

Volume: 1.1 million

Three-Month Average Volume: 117,509

Shares of DRWI are skyrocketing today after the company said its fiscal second-quarter loss narrowed as revenue improved and a gain from its recent acquisition of Nokia Siemens Networks' microwave transport business boosted results.

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From a technical perspective, DRWI is gapping up sharply higher here back above its 50-day moving average of $2.33 with monster volume. This move has also pushed DRWI into breakout territory, since the stock has flirted with some near-term overhead resistance levels at $2.26 to $2.59. At last check, DRWI has hit an intraday high of $2.72 and volume is well above its three-month average action of 117,509 shares.

Traders should now look for long-biased trades in DRWI as long as it's trending above its 50-day at $2.33, and then once it sustains a move or close above some resistance at $2.85 with volume that hits near or above 117,509 shares. If DRWI takes out $2.85 soon with volume, then this stock will setup to re-test or possibly take out its next significant overhead resistance levels at $3.20 to $3.30. Any high-volume move above those levels will give DRWI a chance to tag $4 in the near future.

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