MADISON, Wis. ( 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 Multiband ( MBND), which skyrocketed higher by 24%; Transcat ( TRNS), which jumped higher by 16.4%; Central European Media Enterprises ( CETV), which surged higher by 16.2%; and MannKind ( MNKD), which boomed to the upside by 16.2%. 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 that recently broke out and exploded higher was solar energy player JA Solar ( JASO), which I highlighted in April 11's " 5 Stocks Under $10 Set to Soar Higher" at $4.50 a share. I mentioned in that piece that JASO had recently come out of a nasty downtrend and the stock was starting to spike higher with heavy upside volume. That move was quickly pushing shares of JASO within range of triggering a near-term breakout trade above some overhead resistance levels at $4.66 to $4.89 a share.Guess what happened? Shares of JASO didn't take long to move above those resistance levels following my article. The stock briefly pulled back to a low of $3.87 a share on April 15, and then it took off and cleared those key resistance levels at the end of the month. Shares of JASO then experienced a super spike higher last week with the stock hitting a new 52-week high at $11.40 a share on heavy upside volume. That represents a monster gain of over 100% in very short timeframe for anyone who played the breakout. Keep in mind that JASO never violated either its 50-day or 200-day moving averages after it cleared both at the end of April. That helped guide investors to stay with the trade after it originally broke out. >>5 Big Stocks That Could Drop in May 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 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. >>4 Stocks Rising on Unusual Volume
Check Out Our Best Services for Investors
Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts
Check Out Our Best Services for Investors
Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
Every recommendation goes through 3 layers of intense scrutinyquantitative, fundamental and technical analysisto maximize profit potential and minimize risk.
Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.