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5 Stocks Under $10 Setting Up to Trade Higher

Stocks in this article: ZN DNN KNDI AAU BONE

Denison Mines

Another under-$10 stock that's creeping towards a big breakout is metal mining player Denison Mines (DNN - Get Report), which is engaged in uranium exploration, development, mining and milling with uranium mining projects in both the U.S. and Canada and development projects in Canada, the U.S., Zambia and Mongolia. This stock is blazing a path to glory so far in 2012, with shares up over 55%.

If you take a look at the chart for Denison Mines, you'll notice that this stock recently bounced right around its 200-day moving average of $1.63 a share on heavy volume. That bounce has taken the stock towards its current price of $1.97 in just a few trading sessions. That move has come with big volume, since yesterday's volume was 1.52 million shares, and today's volume is already over 1.93 million shares. Both days easily surpassed its three-month average action of 1,045,970 shares. Now Denison Mines is within range of triggering a big breakout.

>>5 Chinese Stocks With Breakout Potential

Traders should look for long-biased trades in DNN if this stock can manage to break out above some near-term overhead resistance at $1.95 to $2.04 on high volume. Look for volume on the move that's near or well above its three-month average action of 1,045,970 shares.

If we get that action soon, then look for a run back towards $2.30 to $2.43 a share or possibly much higher near $3 a share in the near future. I would simply use a mental stop right below $1.95 if you get long off strength and play this breakout.

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