5 Stocks Under $10 Poised for Upside
Just take a look at some of the hot movers in the under-$10 complex Thursday, including Houston American Energy (HUSA) , which skyrocketed by 33%; Aerosonic(AIM) , which soared by 32%; Recon Technology (RCON) , which surged by 21%; and Logitech International (LOGI) , which also closed up 21%. You don't even have to catch the entire move in lower-priced stocks such as these to make outsized returns when trading.
I'm not as eager to recommend investing long term in stocks that trade less than $10 a share because these names can be very speculative, and the odds for picking the long-term winners aren't great. But I definitely love to trade stocks that are priced below $10. I like to view them as a trading vehicle with lots of volatility and lots of upside when the trade is timed right.
When I trade under-$10 names, I do it almost entirely based off of the charts and technical analysis. I also like to find under-$10 names with a catalyst, but that's secondary to the chart and volume patterns.
With that in mind, here's a look at several under-$10 stocks that look poised to potentially trade higher from current levels .
An under-$10 stock that's starting to flirt with a major breakout trade is Entertainment Gaming Asia (EGT) , which engages in the ownership and leasing of electronic gaming machines in resorts, hotels and other venues, primarily in Cambodia and the Philippines. This stock is off to a red-hot start in 2012, with shares up over 225%.
If you take a look at the chart for Entertainment Gaming Asia, you'll notice that this stock has been uptrending strong since it broke out in March above some resistance at 31 cents per share on high volume. Since triggering that breakout, shares of Entertainment Gaming Asia have soared and printed new highs. Within that move, this stock has been making higher lows and higher highs, which is bullish technical price action.
Now EGT is flirting with another big breakout trade that could trigger a monster spike higher.
Traders should now look for long-biased trades in EGT if it can manage to trigger a break out above some near-term overhead resistance at 75 cents with high volume. Look for volume on a sustained move or close above 75 cents that registers near or well above its three-month average action of 467,494 shares. If we get that action soon, look for EGT to tap $1.00 to $1.25 a share, or possibly even $1.75 if the bulls continue to move into this low-priced stock with big upside volume flows.