5 Stocks Under $10 Poised for Upside

Entertainment Gaming Asia

An under-$10 stock that's starting to flirt with a major breakout trade is Entertainment Gaming Asia (EGT), which engages in the ownership and leasing of electronic gaming machines in resorts, hotels and other venues, primarily in Cambodia and the Philippines. This stock is off to a red-hot start in 2012, with shares up over 225%.

If you take a look at the chart for Entertainment Gaming Asia, you'll notice that this stock has been uptrending strong since it broke out in March above some resistance at 31 cents per share on high volume. Since triggering that breakout, shares of Entertainment Gaming Asia have soared and printed new highs. Within that move, this stock has been making higher lows and higher highs, which is bullish technical price action.

Now EGT is flirting with another big breakout trade that could trigger a monster spike higher.

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Traders should now look for long-biased trades in EGT if it can manage to trigger a break out above some near-term overhead resistance at 75 cents with high volume. Look for volume on a sustained move or close above 75 cents that registers near or well above its three-month average action of 467,494 shares. If we get that action soon, look for EGT to tap $1.00 to $1.25 a share, or possibly even $1.75 if the bulls continue to move into this low-priced stock with big upside volume flows.

Keep in mind that EGT could pull back towards some near-term support at 68 to 60 cents before it makes another run at taking out 75 cents. That said, as long as EGT is trending above 75 cents with strong upside volume flows, then this stock has a great chance of exploding much higher in the near future.

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