Another under-$10 stock that looks ready to trigger a near-term breakout trade is Depomed ( DEPO), which is a specialty pharmaceutical company initially focused on neurology, pain and other diseases of the central nervous system. This stock has been soaring higher during the last six months, with shares up 34.9%.

This biotech player has a major catalyst on the horizon. On March 4, the FDA will hold an advisory committee meeting for their drug Serada to evaluate whether it is a safe and efficacious treatment for menopausal hot flashes.

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If you take a look at the chart for Depomed, you'll notice that this stock has been uptrending strong for the last three months, with shares soaring from its low of $5.35 to its recent high of $7.15 a share. During that uptrend, shares of DEPO have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of DEPO within range of triggering a near-term breakout trade.

Market players should now look for long-biased trades in DEPO if it manages to break out above some near-term overhead resistance and its 52-week high at $7.15 share with high volume. Look for a sustained move or close above $7.15 a share with volume that registers near or above its three-month average volume of 283,651 shares. If that breakout hits soon, then DEPO will set up to re-test or possibly take out its next major overhead resistance levels at $8 to $9 a share.

Traders can look to buy DEPO off any weakness to anticipate that breakout and simply use a stop that sits close to some near-term support at $6.63 a share or its 50-day at $6.36 a share. One can also buy off strength once DEPO takes out $7.15 a share with volume and then simply use a stop that sit near that $6.63 level.

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