Bacterin International

another under-$10 stock that has big upside potential is Bacterin International ( BONE), which develops, manufactures and markets biologics products to domestic and international markets through Bacterin's biologics division. This stock is off to a slow start in 2012, with shares up around 7%.

Northland Securities started coverage on Bacterin International today with an outperform rating and a $4.80 price target. Noble Financial also started coverage on the stock today with a buy rating and a $6.50 price target.

If you take a look at the chart for Bacterin International, you'll notice that this stock has been uptrending strong since buyers stepped in last December at around $1.96 a share. During that uptrend, the stock has been making mostly higher lows and higher highs, which is bullish price action. Now shares of Bacterin International are trading within range of triggering a big breakout. Volume today is also off the charts, since at last check over 1.12 million shares have traded versus its three-month average action of 164,636 shares.

Traders should now look for long-biased trades in BONE if this stock can manage to take out some near-term overhead resistance at $3.03 a share with heavy volume. Look for volume on that move that registers near or well above its three-month average volume of 164,636 shares.

If we get that action today or soon, then look for a big spike in BONE back towards its next significant overhead resistance levels at $3.40 to $3.93 a share, or possibly much higher. At last check, BONE has hit a daily high of $3.01 and the volume is huge, so that breakout could trigger today. Keep in mind that a close over $3.03 would be even more bullish than just an intraday move.

If you get long BONE off a sustained high-volume move and close over $3.03 a share, then I would look to use a stop that's a few percentage points below $3 a share, in case this breakout fails to hold and send the stock off to the races.

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