Biotech Stocks on the Verge of Breakouts: Star Scientific

DELAFIELD, Wis. (Stockpickr) -- These three biotech stocks are within range of triggering breakout trades.

Star Scientific (STSI) engages in the development, manufacture, sale, and marketing of nutraceutical dietary supplements and consumer products. This stock closed up 4.9% to 75 cents per share in Wednesday's trading session.

Wednesday's Range: $0.70-$0.77
52-Week Range: $0.55-$2.59
Thursday's Volume: 1.46 million
Three-Month Average Volume: 1.54 million

From a technical perspective, STSI jumped sharply higher here and broke out above some near-term overhead resistance at 73 cents per share with decent upside volume. This stock has been downtrending badly over the last four months and change, with shares moving lower from its high of $2.59 to its recent low of 55 cents per share. During that downtrend, shares of STSI have been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of STSI have started to reverse that downtrend and enter a new uptrend. This spike on Wednesday is quickly pushing shares of STSI within range of triggering another near-term breakout trade. That trade will hit if STSI manages to take out Wednesday's high of 77 cents to more resistance at 80 cents per share with high volume.

Traders should now look for long-biased trades in STSI as long as it's trending above some key near-term support levels at 69 cents to 65 cents per share and then once it sustains a move or close above those breakout levels with volume that hits near or above 1.54 million shares. If that breakout hits soon, then STSI will set up to re-test or possibly take out its next major overhead resistance levels at 90 cents to its 50-day moving average at 98 cents per share.

To see more stocks that are making notable moves higher, check out the Stocks Under $10 Moving Higher portfolio on Stockpickr.

-- Written by Roberto Pedone in Delafield, Wis.

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At the time of publication, author had no positions in stocks mentioned. Roberto Pedone, based out of Delafield, Wis., is an independent trader who focuses on technical analysis for small- and large-cap stocks, options, futures, commodities and currencies. Roberto studied international business at the Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany. His work has appeared on financial outlets including CNBC.com and Forbes.com. You can follow Pedone on Twitter at www.twitter.com/zerosum24 or @zerosum24.

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