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5 Stocks Under $10 With Big Upside Potential

EasyLink Services

One final under-$10 stock that is nearing a major breakout is EasyLink Services (ESIC), a global provider of value-added services, which facilitate the electronic exchange of documents and information between enterprises, their trading communities and their customers. This stock is off to a strong start in 2011, with shares up over 19%.

If you take a look at the chart for EasyLink Services, you'll see that this stock is gapping up today above both its 50-day and 200-day moving averages, which is bullish technical action. The stock is now quickly approaching a big breakout at around $5.12 a share. What I like about the setup here is that ESIC is trading up over 9% today on huge volume. Volume today has already registered over 650,000 shares, which is well above its three-month average action of 216,000 shares. Now all the stock needs is to close above some overhead resistance at $5.12 to trigger a potential bigger move to the upside.

One could be a buyer of this stock on any weakness, or simply wait for the breakout and buy off a strong move and close above $5.12 a share. I would simply use a stop just below the 50-day moving average of $4.63 a share, or much tighter if you're day trading this for a breakout. If we do get the breakout, then target a run back towards $6 a share or possibly higher.

To see more hot under-$10 stocks, including OCZ Technology Group (OCZ), Smart Balance (SMBL) and Anadys Pharmaceuticals (ANDS), check out the Stocks Under-$10 Setting Up To Trade Higher portfolio on Stockpickr.

-- Written by Roberto Pedone in Winderemere, Fla.

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At the time of publication, author had no positions in stocks mentioned.

Roberto Pedone, based out of Windermere, Fla., is an independent trader who focuses on stocks, options, futures, commodities and currencies. He is also an outside contributor to Beconequity.com and maintains the website Maddmoney.net, which he sold to Blue Wave Advisors in 2008. Roberto studied International Business at The Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany.
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