One name that’s starting to heat up and move within range of triggering a near-term breakout trade is Cleantech Solutions (CLNT), which is engaged in manufacturing and selling high-precision forged rolled rings, yaw bearings and shafts. It also manufactures and sells textile dyeing and finishing machines. This stock hasn’t done much in 2013, with shares off by 7%.
If you look at the chart for Cleantech Solutions, you’ll notice that this stock has just started to bounce higher right above its 200-day moving average of $3.23 a share. That bounce is quickly pushing shares of CLNT within range of triggering a near-term breakout trade.
Market players should now look for long-biased trades in CLNT if it manages to break out above its 50-day moving average of $3.89 a share and then once it clears more overhead resistance at $4.09 a share with high volume. Look for a sustained move or close above those breakout levels with volume that hits near or above its three-month average action of 25,293 shares. If that breakout triggers soon, then CLNT will set up to re-test or possibly take out its next major overhead resistance levels at $4.88 to $5.04 a share, or even at $5.50 to $6.38 a share.
Traders can look to buy CLNT off any weakness to anticipate that breakout and simply use a stop that sit right around its 200-day moving average at $3.23 a share or at $3.09 a share. One can also buy CLNT off strength once it clears those breakout levels with volume and then simply use a stop that’s a few percentage points from your entry point.
This is another favorite target of the short-sellers, since the current short interest as a percentage of the float for CLNT is rather high at 11.4%. We could easily get a large short-squeeze in CLNT, so make sure to keep your eye on this name if it triggers soon.