McDermott International

One under-$10 engineering player that's trending very close to triggering a big breakout trade is McDermott International ( MDR), an engineering, procurement, construction and installation company engaged on designing and executing complex offshore oil and gas projects. This stock has been hit hard by the bears so far in 2013, with shares off by 31%.

>>5 Toxic Stocks You Should Sell

If you take a look at the chart for MDR, you'll notice that this stock recently gapped down sharply from close to $9 a share to its recent low of $6.68 a share with heavy downside volume. Following that move, shares of MDR have started to rebound off that $6.68 low, and the stock is now starting to move within range of triggering a major breakout trade.

Traders should now look for long-biased trades in MDR if it manages to break out above some near-term overhead resistance at $7.74 a share with high volume. Look for a sustained move or close above that level with volume that hits near or above its three-month average action of 4.33 million shares. If that breakout triggers soon, then MDR will set up to re-fill some of its previous gap down zone from August that started near $9 a share. If MDR gets into that gap with volume, then this stock could easily hit $9 to $10 a share.

Traders can look to buy MDR off weakness to anticipate that breakout and simply use a stop that sits right below some near-term support levels at $7.04 o around its recent low of $6.68 a share. One can also buy MDR off strength once it takes out $7.74 a share with volume and then simply use a stop that sits a comfortable percentage from your entry point.

If you liked this article you might like

ReneSola (SOL) Stock Spikes on Q1 Results, Guidance

May 23 Premarket Briefing: 10 Things You Should Know

Solar Stocks Rally After Tax Deal Struck

ReneSola (SOL) Stock Falls on Earnings Miss

3 Stocks Under $10 Making Big Moves