Stereotaxis

 

One stock that's starting to trend within range of triggering a major breakout trade is Stereotaxis (STXS), which designs, manufactures and markets an advanced cardiology instrument control system for use in a hospital's interventional surgical suite to enhance the treatment of arrhythmias and coronary artery disease. This stock has been trending hot so far in 2013, with shares up sharply by 50%.

>>4 Under-$10 Stocks to Trade for Breakouts

If you take a look at the chart for Stereotaxis, youll notice that this stock recently formed a major bottoming chart pattern, with buyers coming in to support the shares at $3.10, $3.23 and $3.11 over the last three months. This stock has now started to trend back above its 50-day moving average of $3.64 a share and it's quickly moving within range of triggering a major breakout trade above some near-term overhead resistance levels.

Traders should now look for long-biased trades in STXS if it manages to break out above some near-term overhead resistance levels at $4.10 to $4.30 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 volume of 1.44 million shares. If that breakout hits soon, then STXS will set up to re-test or possibly take out its next major overhead resistance level at $6.24 a share. Any high-volume move above that level will then give STXS a chance to re-fill some of its previous gap down zone from August that started near $10 a share.

Traders can look to buy STXS off any weakness to anticipate that breakout and simply use a stop that sits right around some near-term support at $3.30 a share. One can also buy STXS off strength once it starts to take out those breakout levels 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

Strong Action in Individual Stocks Starts to Feel a Bit Frothy

There Still Is a Bid Under the Market

Stocks Come Off Highs as Apple Wait Counters Boost From Tax Reform Talk

No Gains for Tech While Investors Wait for Ballyhooed Apple Event

Apple's Strong Guidance Now Makes Perfect Sense