One final under-$10 technology player that's starting to trend within range of triggering a near-term breakout trade is Rambus (RMBS), which invents, develops, offers and licenses technology solutions. This stock hasn't done too much over the last six months, with shares up just 8%.
If you take a look at the chart for Rambus, you'll see that this stock has been uptrending over the last two months, with shares moving higher from its low of $8.38 to its recent high of $9.73 a share. During that uptrend, shares of RMBS have been making mostly higher lows and higher highs, which is bullish technical price action. Shares of RMBS are now starting to spike higher right off its 50-day moving average of $9.12 a share. That move is beginning to push RMBS within range of triggering a near-term breakout trade.
Traders should now look for long-biased trades in RMBS if it manages to break out above some near-term overhead resistance levels at $9.73 to $9.81 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 1.18 million shares. If that breakout hits soon, then RMBS will set up re-test or possibly take out its next major overhead resistance levels at $10.57 to its 52-week high at $10.85 a share. Any high-volume move above those levels will then give RMBS a chance to re-fill some of its previous gap-down-day zone from late 2011 that started at $18.55 a share.
Traders can look to buy RMBS off weakness to anticipate that breakout and simply use a stop that sits just below its 200-day moving average of $8.88 a share or around more support at $8.40 a share. One can also buy RMBS off strength once it starts to clear those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.
To see more hot under-$10 equities, check out the Stocks Under $10 Setting Up to Explode portfolio on Stockpickr.