One under-$10 stock that's trending very close to trigger a major breakout trade is CombiMatrix ( CBMX), a molecular diagnostics company that operates mainly in the field of genetic analysis and molecular diagnostics. This stock has been blasted by the sellers so far in 2013, with shares off by 38%.

If you take a look at the chart for CombiMatrix, you'll notice that this stock has recently put in a triple-bottom chart pattern at $2.80 to $2.97 a share, after the stock crashed lower from $7.64 a share. If shares of CBMX can hold this triple bottom support area, then the stock could be setting up to trigger a major breakout trade above some near-term overhead resistance levels.

Traders should now look for long-biased trades in CBMX if it manages to break out above some near-term overhead resistance levels at $3.73 to $3.78 a share and then once it takes out more resistance at $4.40 a 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 657,703 shares. If that breakout triggers soon, then CBMX will set up to re-test or possibly take out its next major overhead resistance levels at its 200-day moving average of $5.56 to $6 a share. Any high-volume move above $6 will then put $7 to $7.64 into range for shares of CBMX.

Traders can look to buy CBMX off any weakness to anticipate that breakout and simply use a stop that sits just below $3 to $2.80 a share. One can also buy CBMX off strength once it takes out those breakout levels with volume and then simply use a stop that at around $3.20 to $3 a share.

One of the reasons that CBMX has explosive upside potential is because the stock is so heavily shorted. The current short interest as a percentage of the float for CMBX is extremely high at 17.3%. We could easily get a monster short squeeze if CMBX takes out those resistance levels, so make sure to put this name on your breakout trading radar.

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