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

5 Stocks Under $10 Set to Soar

China Auto Logistics

One under-$10 stock that's trending very close to trigger a major breakout trade is China Auto Logistics (CALI), which trades and sells imported automobiles in the People's Republic of China and also offers financing services. This stock has been on a tear during the last six months, with shares up sharply by 65%.

If you take a look at the chart for China Auto Logistics, you'll notice that this stock recently formed a double bottom chart pattern at $2.77 to $2.80 a share. That bottom formed right above its 200-day moving average of $2.69 a share. Shares of CALI are now starting to bounce off those near-term support levels and the stock is quickly moving within range of triggering a major breakout trade.

>>4 Stocks Spiking on Big Volume

Traders should now look for long-biased trades in CALI if it manages to break out above some near-term overhead resistance levels at $3.27 to $3.31 a share and then once it clears its 50-day moving average at $3.39 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average action of 159,787 shares. If that breakout triggers soon, then CALI will set up to re-test or possibly take out its next major overhead resistance levels at $4.50 to $5.50 a share.

Traders can look to buy CALI off weakness to anticipate that breakout and simply use a stop that sits right around its 200-day at $2.69 a share. One can also buy CALI off strength once it takes out those breakout levels with volume and then simply use a stop right below $3 a share.

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