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UIS: Unisys, Rally Off the Bottom?

Another under-$10 stock that's starting to rebound within range of triggering a major breakout trade is Unisys (UIS) , which provides information technology services worldwide. This stock has been smashed lower by the bears over the last six months, with shares down large by 46%.

If you take a look at the chart for Unisys, you'll notice that this stock recently gapped-down sharply lower from around $12 a share to under $8 a share with heavy downside volume flows. Following that move, shares of Unisys went on to print a new 52-week low of $7.10 a share. This stock has now started to rebound notably higher off that $7.10 low on Wednesday with strong upside volume flows. Volume for that trading session registered over 2.10 million shares, which is well above its three-month average action of 924,658 shares. This high-volume rip to the upside is now quickly pushing shares of Unisys within range of triggering a major breakout trade.

Market players should now look for long-biased trades in Unisys if it manages to break out above Wednesday's intraday high of $7.61 a share and then above more key near-term overhead resistance at $7.75 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 924,658 shares. If that breakout hits soon, then this stock will set up to re-test or possibly take out its next major overhead resistance levels at $8 to $8.15, or even $8.70 to around $9.25 a share.

Traders can look to buy this stock off weakness to anticipate that breakout and simply use a stop that sits right around its new 52-week low of $7.10 a share. One can also buy shares of Unisys 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.