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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
Kandi Technologies Group (
KNDI), which skyrocketed higher by 35.9% and
Harvest Natural Resources (
HNR). 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 recently broke out and exploded higher was renewable energy player
Ballard Power Systems (
BLDP), which I highlighted in May 23's "
5 Stocks Under $10 Set to Soar" at $1.20 a share. I mentioned in that piece that shares of BLDP were uptrending strong for the last month or so, with shares consistently making higher lows and higher highs, which is bullish price action. That move was quickly pushing shares of BLDP within range of triggering a near-term breakout trade, which was set to hit if BLDP cleared some key overhead resistance levels at $1.28 to $1.44 and then once it took out its 52-week high at $1.54 a share.
Guess what happened? Shares of BLDP didn't wait long to start triggering that breakout with the stock spiking sharply higher on May 24 with above-average volume. Shares of BLDP continued to skyrocket higher the next two trading sessions with heavy upside volume. The stock exploded higher and hit a new 52-week high on May 29 at $2.39 a share. That represents a gain of close to 100% in just a few trading sessions from the time I flagged the setup. This trade had all the dynamics a breakout trader should look for: uptrending price behavior, a break above key resistance levels and heavy upside volume once the breakout triggered.
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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.
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With that in mind, here's a look at
several under-$10 stocks that look poised to potentially trade higher from current levels.