Bioline Rx

One under-$10 stock that's trending very close to trigger a big breakout is Bioline Rx ( BLRX), a clinical-stage biopharmaceutical development company engaged in identifying, in-licensing and developing therapeutic compounds in areas of central nervous system, oncology, cardiovascular and infectious diseases. This stock has been hammered by the bears so far in 2013, with shares off by 28%.

If you take a look at the chart for Bioline Rx, you'll notice that this stock recently gapped down sharply from over $3.75 to $1.60 a share with heavy downside volume. Following that move, shares of BLRX have started to reverse its bearish price trend and rebound higher, with the stock hitting a recent high of $2.16 a share. That move is quickly pushing shares of BLRX within range of triggering a major breakout trade.

>>4 Health Care Stocks Under $10 to Watch

Traders should now look for long-biased trades in BLRX if it manages to break out above some near-term overhead resistance levels at $2 to $2.16 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 284,000 shares. If that breakout triggers soon, then BLRX will set up to re-fill some of its previous gap down zone from March that started above $3.75 a share.

Traders can look to buy BLRX off weakness to anticipate that breakout and simply use a stop that sits just below $1.75 a share. One can also buy off strength once BLRX takes out those breakout levels with volume and then simply use a stop a few percentage points below your entry point.

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