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.
Legendary investor Warren Buffett advises to be fearful when others are greedy, and be greedy when others are fearful. One way we can try to measure the level of fear in a given stock is through a technical analysis indicator called the Relative Strength Index, or RSI, which measures momentum on a scale of zero to 100.