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

5 Stocks Under $10 Set to Soar Higher

Dara Biosciences

One under-$10 stock in the biotechnology and drugs complex that's trading very close to triggering a breakout trade is Dara Biosciences (DARA), a specialty pharmaceutical company focused on the development and commercialization of oncology treatment and supportive care pharmaceutical products. This stock has been hit hard by the bears during the last six months, with shares down by over 50%.

If you take a look at the chart for Dara, you'll notice that this stock has moved into a sideways trading pattern for the last two months, after it came out of a nasty downtrend from $2.77 to its recent low of 62 cents per share. That sideways trading pattern how has DARA trending between 65 cents on the downside and 77 cents on the upside. Shares of DARA have just started to move above 77 cents per share with high volume, and it now looks poised to trigger another major breakout trade.

>>22 Biopharma Stocks With Breakout Potential in 2012

Market players should now look for long-biased trades in DARA once it breaks out above some near-term overhead resistance at 85 cents to 96 cents per share and then once it takes out more resistance at 98 cents per share with high volume. Look for a sustained move or close above those levels with volume that tracks in close to or above its three-month average action of 73,579 shares. If that breakout triggers soon, then DARA will have a great chance of re-testing and possibly taking out its next major overhead resistance levels at $1.14 to $1.40 a share. That $1.14 area is DARA's 200-day moving average, so $1.40 is very achievable once $1.14 is taken out with volume.

Traders can now look to buy DARA off any weakness to anticipate that breakout, and simply use a stop that either sits right below its 50-day moving average of 72 cents per share, or around more support near 68 cents per share. One could also buy off strength once DARA takes out 85 to 98 cents per share with volume, and then simply use a stop at around 77 cents per share.

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