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5 Stocks Under $10 Set to Soar

LodgeNet Interactive

One name in the broadcasting and Cable TV sector that looks poised for higher prices is LodgeNet Interactive (LNET), a provider of interactive media and connectivity solutions to the hospitality industry in the U.S., Canada and Mexico. The bears have done a number on LNET since this stock is off by over 40% in 2011.

If you take a look at the chart for LodgeNet Interactive, you'll notice that this stock formed a triple top between April and June at $3.80 to $3.70 a share. After forming that top, the stock plunged down to its October low of $1.31 a share. The stock has since then rallied to its current price of $2.40. During that uptrend, the stock has been making mostly higher highs and higher lows, which is bullish.

>>5 Rocket Stocks Poised for Gains

Market players should now watch LNET for a breakout trade if the stock can manage to sustain a high-volume move and close above its 200-day moving average of $2.67 to $2.70 a share. Look for volume that's near or above its three-month average action of 140,381 shares. Volume on Thursday (an up day) was 1.47 million, which is well above the average volume. If we get a high-volume move above those levels I mentioned, then LNET should trend towards $3 to $3.50 a share, or possibly much higher.

You could be a buyer of LNET off any weakness and simply use a mental stop just below the 50-day moving average of $2.16 a share. You could also buy off strength and get long once the stock takes out $2.67 to $2.70 with volume. I would use a mental stop a few percentage points below those levels if you get long off strength.

This stock has a monster short interest since 28.9% of the tradable float currently sold short by the bears. If we get a breakout soon, then look for a large short-squeeze to setup since this stock is a penny stock and it's so heavily shorted.

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