Leap Wireless

One final under-$10 name that's trending very close to triggering a near-term trade is Leap Wireless ( LEAP), which is a wireless communications carrier that offers digital wireless services in the United States of America under the Cricket brand. This stock has been uptrending for the last three months, with shares moving higher by 12.3%.

If you take a look at the chart for Leap Wireless, you'll notice that this stock has just started to bounce strongly right off its 50-day moving average of $6.27 and its 200-day moving average of $6.21 a share. This bounce is quickly pushing the stock within range of triggering a near-term breakout trade.

Traders should now look for long-biased trades in LEAP if it manages to break out above some near-term overhead resistance at $7.02 to $7.18 a share with high volume. Look for a sustained move or close above those levels with volume that registers near or above its three-month average action of 1,871,530 shares. If that breakout triggers soon, then LEAP will set up to re-test or possibly take out its next major overhead resistance levels at $7.75 to $8.16 a share. Any high-volume move above those levels will then put $8.50 to $8.75 into focus for shares of LEAP.

Traders can look to buy LEAP off any weakness to anticipate that breakout and simply use a stop that sits just below its 200-day moving average of $6.21 a share or near some support at $6 a share. One could also buy LEAP off strength once it clears those breakout levels with volume and then simply use a stop that sits just below its 50-day at $6.27 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.

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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.

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