Under $10 Stock Setting Up for a Breakout to Multi-Year Highs

If you have young children, you may be familiar with the educational toy company, LeapFrog Enterprises (NYSE: LF). The small-cap, California-based firm designs and develops technology-based learning tools to help kids tackle reading and writing.

As the mother of 17-month old little boy, I'd have to say his LeapFrog toys are my favorite of the bunch. They're robust, interactive and educational. But, best of all, they're fun -- even for me!
LeapFrog's flagship educational product is the LeapPad2. This is an interactive tablet, like the Apple (NASDAQ: AAPL) iPad, but designed specifically for kids, aged 3 to 9. It retails for around $100. It lets kids play fun, educational games, run apps, and even take pictures.

In the U.K., the LeapPad2 was the hottest selling toy in December. Although it hasn't quite caught on as much in North America, it's still very popular. In fact, during the holidays, retailers, like Toys "R" Us and Amazon.com (NASDAQ: AMZN) only allowed customers to purchase two LeapPads at a time to keep up inventory supply, due to such strong demand. And, with exciting, new products expected to be released in April 2013, the outlook for LeapFrog looks promising.

From a technical perspective, LeapFrog stock appears to be on the verge of a bullish breakout.

Surging from a low of $2.57 in August 2011, the stock formed a major uptrend line, hitting a multi-year high of $12.28 in late July 2012. However, unable to sustain this momentum, shares began to fall in August.  (more)

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