This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
$1 buys you full access to ALL of TheStreet's Subscription Services! Learn More

5 Stocks Under $10 Poised for Breakouts

Stocks in this article: ONTYNTSPMITKKITDRMBS

Mitek Systems

An under-$10 name in software and programming complex that's trading within range of a major breakout trade is Mitek Systems (MITK), which is engaged in the development, sale and service of software solutions related to mobile imaging applications and intelligent recognition software. This stock is stock has been destroyed by the bears so far in 2012, with shares down by over 60%.

If you take a look at the chart for Mitek Systems, you'll notice that this stock topped out back in March at just under $13 a share. After forming that top, shares of MITK plunged with big selling volume to under $6 a share. Then, in early May, this stock gapped down big from over $5 to under $3 a share with heavy volume. Following that gap-down, the stock has continued to trend lower and it's recently hit a low of $1.90 a share.

>>7 Value Stocks to Buy in Facebook's Wake

That said, now the stock has started to reverse the downtrend during the last few weeks, and it's now within range of triggering a near-term breakout trade.

Traders should now look for long-biased trades in MITK if it can manage to trigger a breakout above yesterday's high of $3.12, and then above its May gap-down day high of $3.30 a share with high volume. Look for a sustained move or close above those levels on volume that hits near or well above its three-month average action of 1.2 million shares. If we get that action soon, then MITK start to fill that gap and possibly take out its 50-day moving average of $3.86 a share. A move higher through its 50-day could easily spike MITK close to $6 a share as that gap gets filled.

If you're bullish on MITK, then one could buy off weakness and simply use a stop just below Wednesday's low of $2.39 a share. If this stock is truly ready for big spike higher, then I doubt it takes out that low. It might be better to buy off strength and get long once MITK gets into that gap above $3.30 a share, and then add to any long positions above its 50-day at $3.86 a share. I would consider it very bullish price action for MITK if it can recapture its 50-day and sustain a high-volume trend above that level.

4 of 6

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,827.75 +12.81 0.07%
S&P 500 2,072.83 +5.80 0.28%
NASDAQ 4,787.3170 +29.0650 0.61%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs