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 InfoSonics (IFON), which is exploding higher by 42%; FreeSeas (FREE), which is ripping higher by over 30%; NewLead (NEWL), which is spiking higher by 17%; and North American Palladium (PAL), which is soaring to the upside by 16%. 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 has exploded higher since I featured it recently is defense and security products player Arotech (ARTX), which I highlighted in Nov. 21's "5 Stocks Under $10 Set to Soar" at $2.07 per share. I mentioned in that piece that shares of Arotech were spiking higher at the time back above its 50-day moving average of $1.84 a share with above-average volume. This move was quickly pushing shares of ARTX within range of triggering a major breakout trade above some near-term overhead resistance levels at $2.35 to its 52-week high at $2.71 a share.
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Guess what happened? Shares of Arotech didnt wait long to trigger that breakout, since the stock started to take out those key overhead resistance levels in early to mid-December with strong upside volume flows. Shares of ARTX have done nothing but uptrend strong since I flagged the stock, with shares tagging a new 52-week high a few days ago at $3.91 a share. That represents a monster gain of close to 90% in a very short timeframe.
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.