WINDERMERE, Fla. ( Stockpickr) -- There isn't a day that goes by on Wall Street when certain stocks trading for $10 a share or less don't experience massive spikes higher. Traders savvy enough to follow the low-priced names and trade them with discipline and sound risk management are banking ridiculous coin on a regular basis.
Just take a look at some of the hot movers in the under-$10 complex from Wednesday, including Kips Bay Medical (KIPS), which soared by 26.2%; China Hydroelectric (CHC), which ripped higher by 17%; Amyris (AMRS), which trended up by 16.3%; and RF Micro Devices (RFMD), which spiked higher by 10.9%. You don't even have to catch the entire move in lower-priced stocks such as these to make outsized returns when trading.
One low-priced stock recently exploded to the upside was Supervalu (SVU), which I highlighted in Oct. 18's " 5 Stocks Under $10 Set to Soar" at around $2.10 a share. I mentioned that SVU had rebounded off its recent low of $1.80 a share with decent volume and was starting to approach its 50-day moving average at $2.28 a share. That rebound was also pushing SVU within range of triggering a near-term breakout trade above $2.28 to $2.62 a share.Guess what happened? Just two days later, shares of SVU exploded above $2.28 to $2.62 a share with monster upside volume. The stock went on to hit a high of $3.17, which is one point higher from where I wrote the article. That's a massive gain in just a few days. Shares of SVU still look bullish, and the stock could be setting up for another major breakout if it can manage to take out $3 to $3.17 a share with volume soon. Any high-volume move then above $3.50 would give SVU a chance to re-fill some of its previous gap done zone from July that started near $5.30 a share. >>Dow 55,000? It's Closer Than You Think Low-priced stocks are something that I tweet about on a regular basis. I frequently flag high-probability setups, breakout candidates and low-priced stocks that are acting technically bullish. I like to hunt for low-priced stocks that are showing bullish price and volume trends, since that increases the probability of those stocks heading higher. These setups often produce monster moves higher in very short time frames. I'm not as eager to recommend investing long-term in stocks that trade for less than $10 a share because these names can be very speculative, and the odds for picking the long-term winners aren't great. But I definitely love to trade stocks that are priced below $10. I like to view them as a trading vehicle with lots of volatility and lots of upside when the trade is timed right. When I trade under-$10 names, I do it almost entirely based off of the charts and technical analysis. I also like to find under-$10 names with a catalyst, but that's secondary to the chart and volume patterns. With that in mind, here's a look at several under-$10 stocks that look poised to potentially trade higher from current levels.