5 Stocks Under $10 With Big Upside Potential

Broadwind Energy

One under-$10 stock that's sitting right around some key breakout levels is wind energy player Broadwind Energy (BWEN). This stock has been crushed by the sellers so far in 2011, with shares off by over 70%.

If you take a look at the chart for Broadwind Energy, you'll notice that this stock has been uptrending for the past two months, after it hit a low at 26 cents in early October to its recent high of 76.8 cents. The stock has now pulled back towards some near-term support at 60 cents, so if it can hold that support, traders should watch for a big breakout in the near future.

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Market players should look for a sustained move and close above 77 cents to 87 cents a share on high volume. A high-volume move above those levels should set this stock up to spike huge and potentially register 50% or more in gains. I say this because the next resistance levels are at the 200-day moving average of $1.09 and some more prior resistance at $1.47 a share. This means the upside is big if the breakout does trigger, since resistance sits so far way.

You could be a buyer of this stock off any weakness and anticipate the breakout. I would simply use a stop right around 60 cents in case the stock isn't ready to take off just yet. You could also buy off strength and get long once 77 cents is taken out, and then add once 87 cents is breached. Look for volume on any future breakout that registers close to or above its three-month average action of 1.56 million shares.

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