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TheStreet Open House

5 Stocks Under $10 Ready to Soar Higher

Northern Dynasty Minerals

An under-$10 stock in the gold and silver complex that looks poised to trend higher from here is Northern Dynasty Minerals (NAK), which is engaged in the exploration of mineral properties. Northern Dynasty Minerals holds 650 square miles of mineral claims in southwest Alaska. This stock is off to a bearish start in 2012, with shares down by over 58%.

If you take a look at the chart for Northern Dynasty Minerals, you'll notice that this stock was slammed by the bears from March to late May, with shares plunging from over $7 to $2.25 a share. During that nasty move lower, shares of Northern Dynasty Minerals were consistently making lower highs and lower lows, which is bearish technical price action. That said, for the last two months this stock has started to mark a possible bottom, with shares trading between $2.20 and $2.94. This sideways price action is now setting up NAK to trigger a major breakout trade.

>>5 Stocks With Big Insider Buying

Traders should now look for long-biased trades in NAK if this stock can manage to break out above its 50-day moving average at $2.50 a share, and then above some more overhead resistance levels at $2.72 to $2.94 a share with high volume. Look for a sustained move or close above those levels with volume that registers near or above its three-month average action of 291,714 shares. If we get that action soon, then NAK will have a great chance of hitting its next major overheard resistance levels at $3.75 to $4.31 a share.

If you're bullish on NAK, then one could look to buy this stock off any weakness and simply use a stop just below $2.27 to $2.20 a share. One could also buy off strength and get long once NAK clears its 50-day with high volume, and then simply use a stop below $2.27 to $2.20 a share. Look to add to any long position once NAK takes out $2.72 to $2.94 a share with high volume.

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