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TheStreet Open House

5 Stocks Under $10 Poised to Move Higher


Another under-$10 stock that's just starting to flirt with a major breakout trade today is TearLab (TEAR), an in-vitro diagnostic company. This stock is off to a monster start in 2012, with shares up over 236%.

If you take a look at the chart for TearLab, you'll see that this stock has been uptrending beautifully for the past six months, with shares running from 77 cents to today's high of $4.04. During that uptrend, this stock has consistently made higher lows and higher highs which is bullish technical price action. That move has now pushed TEAR within range of trigging a near-term breakout trade.

>>7 Hot Stocks on Traders' Radars

Market players should now look for long-biased trades in TEAR if this stock can manage to break out above some near-term overhead resistance at $3.89 a share with high-volume. Look for volume on that move that registers near or well above its three-month average action of 200,322 shares. At last check, volume on Thursday has already hit over 363,000 shares and the stock has hit a daily high of $4.04.

Watch for any sustained high-volume move and close above $3.89 and near its daily high to signal that TEAR wants to trend much higher. Keep in mind that this potential breakout in TEAR could be a significant one since the next major overheard resistance won't come into play until around $5.14 a share. The closest near-term support level is at $3.35 a share, which could be used as your stop. That said, I would rather be long off of strength with TEAR maintaining its trend over $3.89 with strong upside volume flows.

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