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TheStreet Open House

5 Stocks Under $10 With Big Upside Potential

OCZ Technology Group

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One under-$10 stock that's setting up to break out is OCZ Technology (OCZ), a provider of high performance solid state drives and memory modules for computing devices and systems. This stock, which I also featured earlier this month in " 5 Stocks Set to Soar off Bullish Earnings," has been trending strong in 2011, with shares up over 20%.

If you take a look at the chart for OCZ Technology Group, you'll see that this stock plunged huge from its July high of $10.94 a share to a recent low of $4.14 a share hit in early October. Since printing that low, the stock has started to rebound sharply and is now trading over $5.50 a share. Shares of OCZ have also started to make lower highs in October, which is bullish and shows that traders are paying up to for this stock.

Market players should now watch this stock very closely for a strong volume move above some big overhead resistance at around $6 a share. A strong volume move above that level will then set this stock up to re-test its 200-day moving average of $7.32 a share. Volume today is tracking in extremely strong, and the stock is soaring more than 11%. At last check, volume has registered 2.8 million shares, which is well above its three-month average volume of 1.5 million shares.

One could be a buyer of this stock off any weakness and simply use a mental stop at near the 50-day moving average of $5.40 a share. If we don't get much weakness, then I would look to get long once this stock busts above $6 a share on strong volume. Look for volume that's tracking in close to or above the 1.5 million shares. I would then add aggressively to any long position once this stock takes out its 200-day moving average of $7.32 with strong volume. A high-volume move above those levels should set this stock up for a huge move higher.

This stock has an enormous short interest, with 36.3% of the tradable float currently sold short by the bears. If we see that breakout trigger in the coming days or weeks, then look for a giant short squeeze to take hold as long as the volume is there.

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