An under-$10 name in the auto and truck space that's quickly approaching a major breakout trade is
(KNDI - Get Report)
, which is engaged in the design, development, manufacturing, and commercializing of electrical vehicle, all-terrain vehicles, go-karts, and specialized automobile related products for the People's Republic of China and global export markets. This stock hasn't done much in 2012, with shares off by around 3.7%.
If you take a look at the chart for Kandi Technologies, you'll see that this stock has been in a strong uptrend for the past few months, with shares consistently making higher lows and higher highs. That uptrend has taken the stock from its October low of $1.88 towards its current price of just over $3.50 a share. Now shares of Kandi Technologies are within range of a triggering a breakout trade.
Market players should look for long biased trades in KNDI if the stock can manage to take out some near-term overhead resistance at $3.85 to $4.19 with volume. Watch for volume on that move that's near or above its three-month average action of 119,328 shares.
If we get that action soon, then look for KNDI to make a run at its next significant overhead resistance levels near $4.48 to $5.50 a share. I would get long off a strong volume move over $3.85 and simply use a stop a few percentage points below that level.
To see more hot under-$10 stocks, check out the
Stocks Under-$10 Setting Up To Trade Higher
portfolio on Stockpickr.
-- Written by Roberto Pedone in Winderemere, Fla.
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