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Stocks Under $10 with 50-100% upside potential - 14 days FREE!

5 Stocks Under $10 With Big Upside Potential

Plug Power

Another under-$10 name that should be on your radar right now is fuel cell systems maker Plug Power (PLUG). This stock has struggled so far in 2011, with shares off by around 38%.

If you take a look at the chart for Plug Power, you'll see that this stock plunged from its May high of $6.20 to a recent low of $1.35 a share. After hitting that low, the stock has started to rebound and print higher highs and higher lows, which is bullish price action. The stock now sets up for a big breakout if it can manage to clear some past overhead resistance levels.

Market players should watch for a breakout trade to trigger if PLUG can manage to move above $2.36 to $2.63 on high-volume. A sustained move and close above those levels should set this stock up to re-test its 200-day moving average of $3.82, or possibly even higher. Traders should watch for volume to register close to or above its three-month average action of 200,411 shares on any breakout.

>>Stocks Rising on Unusual Volume

One could be a buyer of this stock off any significant weakness and simply anticipate the breakout. I would use a mental stop just below some near-term support at $2.12 if you buy off weakness. If you prefer to buy strength, than buy the breakout once it takes out $2.36 with strong volume. Use a tight mental stop a few percentage points below $2.36 if you get long off strength.

The current short interest as a percentage of the float for PLUG is 7.3%. If we do see that breakout in the coming days or weeks, then look for a solid short-covering rally to materialize since the short interest is decent here.

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