Traders should now look for long-biased trades in VDSI once it breaks out above some near-term overhead resistance levels at $7.49 to $7.60 a share, and then once it clears its gap down day high of $7.90 a share with high volume. Look for a sustained move or close above those levels with volume that hits close to or above its three-month average action of 167,948 shares. If that breakout triggers soon, then VDSI will set up to re-test or possibly take out its next significant overhead resistance levels at $8.64 to $9 a share, or possibly even $9.95 to $10.41 a share.

One could look to buy VDSI off weakness to anticipate that breakout and simply use a stop that sits just below some previous support levels at $7 to $6.95 a share. One could also buy off strength once VDSI clears those breakout levels with volume and then simply use a stop that sits just below $7.25 a share.

To see more hot under-$10 equities, check out the Stocks Under $10 Setting Up to Explode portfolio on Stockpickr.

-- Written by Roberto Pedone in Winderemere, Fla.

RELATED LINKS:



Follow Stockpickr on Twitter and become a fan on Facebook.

At the time of publication, author had no positions in stocks mentioned.

Roberto Pedone, based out of Windermere, Fla., is an independent trader who focuses on technical analysis for small- and large-cap stocks, options, futures, commodities and currencies. Roberto studied international business at the Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany. His work has appeared on financial outlets including CNBC.com and Forbes.com. You can follow Pedone on Twitter at www.twitter.com/zerosum24 or @zerosum24.

If you liked this article you might like

5 Stocks Under $10 Set to Soar

Analysts' Actions -- Capital One, Cisco, Fifth Third, PulteGroup and More

3 Stocks Pushing The Telecommunications Industry Lower

3 Stocks Moving The Technology Sector Upward

3 Stocks Driving The Telecommunications Industry Higher