5 Biotech Stocks Under $10 Set to Soar
Traders should now look for long-biased trades in HALO if it can manage to trigger a near-term breakout trade above some overhead resistance levels at its 200-day moving average of $9.39 a share, and above some more resistance at $9.83 a share with high volume. Look for a sustained move or close above those levels with volume that's near or above its three-month average volume of 792,700 shares. If we get that action soon, then HALO could re-fill the rest of that gap and take out $11.50 a share, and then possibly re-test its March high of $13.50 a share.
One could be a buyer of HALO off weakness to anticipate that breakout, and simply use a stop just below its 50-day moving average of $8.45 a share. If you buy off weakness, then I would add to the position once $9.39 to $9.83 is taken out with heavy upside volume. One could also buy off strength and get long once those breakout levels are taken out with volume, and simply use a stop just below $9.39 a share.
The short-sellers are active in this stock, since the current short interest as a percentage of the float for HALO is very high at 11.8%. If that breakout triggers soon, then a big short-squeeze could develop as HALO moves back into that gap from back in April.
To see more hot under-$10 equities, check out the Stocks Under-$10 Setting Up to Explode portfolio on Stockpickr.
-- Written by Roberto Pedone in Winderemere, Fla.