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Stocks Under $10 with 50-100% upside potential - 14 days FREE!

5 Stocks Under $10 Setting Up to Trade Higher

Kandi Technologies

An under-$10 name in the auto and truck space that's quickly approaching a major breakout trade is Kandi Technologies (KNDI), 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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At the time of publication, author had no positions in stocks mentioned.

Roberto Pedone, based out of Windermere, Fla., is an independent trader who focuses on stocks, options, futures, commodities and currencies. He is also an outside contributor to Beconequity.com and maintains the website Maddmoney.net, which he sold to Blue Wave Advisors in 2008. Roberto studied International Business at The Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany.
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