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TheStreet Open House

4 Stocks Under $10 With Big Upside Potential

Stocks in this article: BRCDAMRNSHORLEI

ShoreTel

One name under $10 in the communications equipment complex that's worth watching here is ShoreTel (SHOR), a provider of business communication solutions. This stock is off by around 25% so far in 2011.

If you take a look at the chart for ShoreTel, you'll notice that this stock plunged from its July high of $10.84 to a recent low of $4.57 a share. After hitting that low, the stock has started to form a more bullish trend with shares making higher highs and higher lows. Shares of ShoreTel recently slipped back below its 50-day moving average of $5.75, but buyers have started to move into the stock just below that level at $5.50.

Market players should watch for SHOR to move back above its 50-day at $5.75 on high volume, to signal that the stock wants to make trend higher again. Look for volume on a move and close above the 50-day that clocks in close to its three-month average action of 493,252 shares. If see that action, then look for shares of SHOR to make a run at its next significant overhead resistance level of $6.97, or possibly much higher towards its 200-day moving average of $8.02.

Once could be a buyer of this stock off any noticeable weakness and set a mental stop at around $5.20 a share, or use an even tighter stop at just under $5.45. You could also buy off strength and get long once the stock sustains a move and close above $5.75 on high-volume. Simply use a mental stop a few percentage points below $5.75 if you buy off strength.

ShoreTel shows up on a list of 10 Tech Stocks With at Least 50% Upside.

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