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5 Stocks Under $10 Set to Soar

Stocks in this article: SVULPRINOGURECPRX

Gulf Resources

Another under-$10 name that's trading very close to triggering a major breakout trade is Gulf Resources (GURE), which is engaged in manufacturing and trading of bromine and crude salt, and manufacturing and selling of chemical products used in oil and gas field exploration, oil and gas distribution, oil field drilling, wastewater processing, papermaking chemical agents and inorganic chemicals. This stock has been trending lower so far in 2012, with shares down by around 27%.

If you take a look at the chart for Gulf Resources, you'll see that this stock has been trending sideways for the last three months, with shares moving between $1.02 on the downside and $1.33 on the upside. In just the last two trading sessions, GURE has started to see monster upside volume flows as the stock has now started to move within range of triggering a major breakout trade above the highs of its recent range.

Market players should now look for long-biased trades in GURE if it can manage to trigger a break out above some near-term overhead resistance levels at $1.33 to $1.48 a share with high volume. Look for a sustained move or close above those levels with volume that hits close to or above its three-month average action of 82,095 shares. If that breakout triggers soon, then GURE will setup to re-test or possibly take out its next major overhead resistance levels at $1.73 to $1.78 a share. Any high-volume move above those levels will put $2.20 to $2.30 into focus for GURE.

Traders can look to get long GURE off any weakness, and simply use a stop that sits right around its 50-day moving average of $1.14 a share. One could also buy GURE off strength once it takes out $1.24 to $1.33 with volume, and then add again once it clears $1.48 with volume.

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