Another stock that's moving within range of triggering a near-term breakout trade is Celsion (CLSN), which is an innovative oncology drug development company focused on the development of treatments for those suffering with difficult to treat forms of cancer. This stock has been destroyed by the sellers so far in 2013, with shares off by 84%.
If you look at the chart for Celsion, you'll notice that this stock recently gapped down huge from around $8.50 a share to just under $1.50 a share with monster downside volume. Following that gap down, shares of CLSN went on to hit a new low of $1.13 a share. That move has now pushed shares of CLSN into extremely oversold territory, since its current relative strength index (RSI) reading is 22.07. Oversold can always get more oversold, but shares of CLSN are now starting to rebound and approach a near-term breakout trade. If this trade triggers, then CLSN could explode higher since the stock is dramatically oversold.
Traders should now look for long-biased trades in CLSN once it manages to break out above some near-term overhead resistance levels at $1.32 to $1.50 a share and then once it takes out its gap down day high at $1.72 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 volume of 3,349,340 shares. If that breakout triggers soon, then CLSN will set up to re-fill some of that massive gap down zone from a few weeks ago. Some possible upside targets are $2 to $2.75 a share.
Traders can look to buy CLSN off any weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support at $1.13. One can also buy off strength once CLSN takes out those breakout levels with volume and then simply use a stop that sits just below $1.25 a share. I would add aggressively to either position once CLSN takes out that gap down day high at $1.72 a share with high volume.