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WINDERMERE, Fla. ( Stockpickr) -- There isn't a day that goes by on Wall Street where stocks trading near or under $10 a share 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
Life Partners(LPHI), which skyrocketed higher by 150%;
Star Scientific(STSI), which trended up by 14%;
CalAmp(CAMP), which ripped higher by 13%; and
Dial Global(DIAL), which closed up 11.9%. You don't even have to catch the entire move in lower-priced stocks such as these to make outsized returns when trading.
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One low-priced stock that I recently highlighted that went on to rip to the upside was
Dara BioSciences(DARA). I featured DARA in Aug. 30's "
5 Stocks Under $10 Set to Soar Higher" article at around 84 cents per share. I mentioned that DARA had been trending sideways between 65 cents and 77 cents per share, and it was just starting to break out above the high-end of that sideways chart pattern with strong volume. I mentioned that DARA was setting up to trigger another major breakout if it cleared 85 to 98 cents per share with strong upside volume.
Guess what happened? Shares of DARA triggered that breakout with monster upside volume in the middle of September. Once DARA cleared 85 to 98 cents with volume, the stock went on to hit a recent high of $1.38 a share. That's a massive move higher in a very short timeframe from when I wrote that article. The best part about this breakout is that you had price, volume and trend all working together. Shares of DARA still look bullish and ready to challenge that $1.38 area as long as the stock can hold a trend above some near-term support at $1.03 a share.
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.
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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.