5 Stocks Under $10 Set to Trade Higher in November

Education Management

A final under-$10 name that's trading within range of triggering a major breakout trade is Education Management (EDMC). This company is a provider of post-secondary education in North America. It offers academic programs to its students through campus-based and online instruction, or through a combination of both. This stock has been hit hard by the sellers so far in 2012, with shares down by a whopping 88%.

If you take a look at the chart for Education Management, you'll see that this stock has been trending sideways for the past two months, with shares moving between $2.88 on the downside and $4.04 on the upside. Just today, shares of EDMC have started to flirt with its 50-day at $3.35 a share, and it's quickly moving within range of triggering a major breakout trade. That breakout will hit once EDMC trends topside of its recent range with decent volume.

Traders should now look for long-biased trades in EDMC once it manages to break out above some near-term overhead resistance at $3.70 to $4.04 a share, and then once it takes out $4.28 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 185,692 shares. If that breakout triggers soon, then EDMC could easily hit $5 to $5.50 a share, or possibly even higher towards $6 a share.

One could look to buy EDMC off weakness to anticipate that breakout, and simply use a stop that sits just below some previous support levels at $3.02 to $2.95 a share. One could also buy off strength once EDMC clears $3.70 to $4.28 a share with high volume, and then simply use a stop just below $3.70 or right around its 50-day at $3.35 a share.

To see more hot under-$10 equities, check out the Stocks Under $10 Setting Up to Explode portfolio on Stockpickr.

-- Written by Roberto Pedone in Winderemere, Fla.

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At the time of publication, author had no positions in stocks mentioned.

Roberto Pedone, based out of Windermere, Fla., is an independent trader who focuses on technical analysis for small- and large-cap stocks, options, futures, commodities and currencies. Roberto studied international business at the Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany. His work has appeared on financial outlets including CNBC.com and Forbes.com. You can follow Pedone on Twitter at www.twitter.com/zerosum24 or @zerosum24.

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