DELAFIELD, 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 Thursday, including Neurometrix (NURO), which is soaring by 38%; OCZ Technology (OCZ), which is ripping higher by 21%; Westell Technologies (WSTL), which is soaring by 19%; and Merrimack Pharmaceuticals (MACK), which is spiking up by 17%. 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's soaring higher today is payment services player Higher One (ONE), which I highlighted in Oct. 10's "5 Stocks Under $10 Set to Soar" at $7.81 per share. I mentioned in that piece that shares of Higher One had formed a double bottom chart pattern at $7.05 to $6.97 a share, after downtrending badly form $11.93 to $6.97 a share. Shares of ONE were started to rebound sharply off that double-bottom zone, and it was starting to move within range of triggering a near-term breakout trade above resistance at $7.85 and its 50-day moving average.>>5 Stocks With Big Insider Buying Guess what happened? Shares of Higher One didn't wait long to trigger that breakout, since the stock took out those key overhead resistance levels the following week. Shares of ONE are now exploding higher today and launching cleanly above all near-term overhead resistance levels with large upside volume. This stock has tagged an intraday high today of $9.99 a share, which represents a huge gain of close to 30% from the time of this writing. This stock now has a great a chance to hit $11 to $12 in the coming weeks, so make sure to keep this name on your radar. 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. >>5 Stocks Ready to Break Out This Week 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.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
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
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV