Skystar Bio Pharmaceuticals
My final idea that could be preparing for a massive move higher is Skystar Bio Pharmaceutical (SKBI), which engages in the research, development, production, marketing and sale of veterinary health care and medical care products in the People's Republic of China. This stock has been in play with the bulls over the last six months, with shares up big by 167%.
If you look at the chart for Skystar Bio Pharmaceutical, you'll notice that this stock has been uptrending strong over the last two months, with shares moving higher from its low of $3.22 to its recent high of $4.77 a share. During that uptrend, shares of SKBI have been making mostly higher lows and higher highs, which is bullish technical price action. That move is quickly pushing shares of SKBI within range of triggering a major breakout trade.
Traders should now look for long-biased trades in SKBI if it manages to break out above some near-term overhead resistance levels at $4.77 to $5 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 76,215 shares. If that breakout triggers soon, then SKBI will set up to re-test or possibly take out its next major overhead resistance levels at $5.94 to its 52-week high at $6.50 a share. If $6.50 gets taken out with volume, then SKBI could easily tag $7.50 to $8.50 a share.
Traders can look to buy SKBI off any weakness to anticipate that breakout and simply use a stop that sits right below its 50-day moving average of $3.89 a share. One can also buy SKBI off strength once it starts to take out those breakout levels with volume and then simply use a stop that sits a conformable percentage from your entry point.
To see more stocks that could be setting up for monster moves higher soon, check out the Explosive Stock Watchlist portfolio on Stockpickr.
-- Written by Roberto Pedone in Delafield, Wis.