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5 Under-$10 Stocks Primed to Trade Higher

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.

>>5 "Magic Formula" Stocks for 2013

Just take a look at some of the hot movers in the under-$10 complex from Wednesday, including Progenics Pharmaceuticals (PGNX), which skyrocketed by 21%; Canadian Solar (CSIQ), which soared by 11.7%; Partner Communications (PTNR), which trended higher by 11.3%; and JA Solar (JASO), which surged by 9.3%. 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 ripped to the upside was DragonWave (DRWI), which I highlighted in Dec. 13's " 5 Under-$10 Stocks Showing Profit Potential" at around $2.33 a share. I mentioned in that piece that DRWI had been uptrending for the last month, with the stock making mostly higher lows and higher highs, which is bullish technical price action. That bullish price action was quickly pushing DRWI within range of triggering a big breakout trade. That trade was set to hit once DRWI cleared some near-term overhead resistance levels at $2.50 to $2.52 a share and then once it took out more overhead resistance at $2.72 to $2.91 a share.

Guess what happened? Shares of DRWI went on to trigger that breakout just three trading sessions later with monster upside volume. The stock has continued to soar and shares of DRWI have hit a recent high of $3.28 a share. That's a big move in just a few weeks for anyone who took that trade. Shares of DRWI could still be poised for more upside if the stock can continue to trend above its 200-day at $2.88 a share and then once it breaks out again over its recent high of $3.28 a share with volume.

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.
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