Denison Mines

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Another under-$10 name you should put on your trading radar is Denison Mines ( DNN), which is engaged in uranium exploration, development, mining and milling with uranium mining projects in both the U.S. and Canada and development projects in Canada, the U.S., Zambia and Mongolia. The bears have decimated this stock in 2011, with shares off by over 60%.

If you take a look at the chart for Denison Mines, you'll notice that this stock formed a perfect double-top chart pattern in early August at around $2.20 a share. Since that double top, the stock has plunged all the way down to a recent low of 81 cents a share. The stock has now rebounded sharply off that low to its current price of around $1.24 a share.

Market players should now watch for a breakout trade if this stock can manage to trade and close above $1.26 a share and above its 50-day moving average of $1.36 a share on big volume. A sustained high-volume move above those overhead resistance levels should set this stock up for a big run back towards $1.70 a share or possibly even higher. Volume today is tracking in decent with over 1.355 million shares traded at last check, which is very close to its three-month average volume of 1.47 million shares.

One could be a buyer of this stock off any noticeable weakness and simply use a mental stop just below $1.20 a share. I would start to add long aggressively once this stock takes out the 50-day moving average of $1.36 with strong volume. If we get that trigger, then I see DNN making a large rip higher, so put this name on your trading radar.

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