NEOS - Neos Therapeutics
Another under-$10 stock that's starting to trend within range of triggering a big breakout trade is Neos Therapeutics (NEOS) , which develops, manufactures and commercializes products for the treatment of attention deficit hyperactivity disorder using its drug delivery technologies. This stock has been smacked lower by the sellers over the last six months, with shares dropping sharply lower by 52.7%.
If you look at the chart for Neos Therapeutics, you'll notice that this stock has been downtrending badly over the last six months, with shares collapsing off its of over $26 a share to its new 52-week low of $8.91 a share. During that massive downtrend, this stock has been making mostly lower highs and lower lows, which is bearish technical price action. That said, shares of Neos Therapeutics displayed some modest relative strength on Wednesday versus the overall market weakness, after the stock traded up 1% with slightly above-average volume. This relative strength to the upside is now quickly pushing this stock within range of triggering a big breakout trade above some near-term overhead resistance levels.
Market players should now look for long-biased trades in Neos Therapeutics if it manages to break out above some near-term overhead resistance levels at $10 to $10.50 a share and then above more key resistance levels at $11 to $11.06 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 102,905 shares. If that breakout develops soon, then this stock will set up to re-test or possibly take out its next major overhead resistance levels at its 20-day moving average of $11.38 to $11.50, or even $12 to its 50-day moving average of $13.16 a share.
Traders can look to buy Neos Therapeutics off weakness to anticipate that breakout and simply use a stop that sits right below its new 52-week low of $8.91 a share. One can also buy this stock off strength once it starts to trend above those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.
MPO - Midstates Petroleum
One final under-$10 stock that's starting to trend within range of triggering a major breakout trade is Midstates Petroleum (MPO - Get Report) , which engages in the exploration, development and production of oil, natural gas liquids and natural gas in the U.S. This stock has been annihilated by the sellers over the last six months, with shares plunging lower by 86.3%.
If you take a glance at the chart for Midstates Petroleum, you'll notice that this stock has been downtrending badly over the last five months, with shares collapsing off its high of $7.70 to its new 52-week low of 64 cents per share. During that downtrend, this stock has been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of Midstates Petroleum spiked sharply higher on Wednesday and displayed some relative strength versus the overall market weakness with strong upside volume flows. This high-volume trend to the upside is now quickly pushing this stock within range of triggering a major breakout trade above some key near-term overhead resistance levels.
Traders should now look for long-biased trades in Midstates Petroleum if it manages to break out above some key near-term overhead resistance levels at 80 to 91 cents per share and then above more resistance around $1 a share with high volume. Look for a sustained move or close above those levels with volume that registers near or above its three-month average action of 147,608 shares. If that breakout fires off soon, then this stock will set up to re-test or possibly take out its next major overhead resistance levels at its 20-day moving average of $1.25 to around $1.50, or even $2 a share.
Traders can look to buy shares of Midstates Petroleum off weakness to anticipate that move and simply use a stop that sits right around its new 52-week low of 64 cents per share. One can also buy this stock off strength once it starts to bust above those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.
5 stocks under $10 set to soar
There isn't a day that goes by on Wall Street when certain stocks trading for under $10 a share don't experience massive spikes higher. Traders savvy enough to follow the low-priced names and trade them with discipline and sod risk management are banking ridiculous coin on a regular basis.
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