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 big movers in the under-$10 complex from Thursday, including New Concept Energy (GBR), which is exploding higher by 29%; Golden Minerals (AUMN), which is ripping to the upside by 27%; StemCells (STEM), which is soaring higher by 20%; and Swisher Hygiene (SWSH), which is moving 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 ripping to the upside today is American Apparel (APP), which I highlighted in May 30's "5 Stocks Ready to Break Out" at around 60 cents per share. I mentioned in that piece that shares of American Apparel were starting to bounce higher right off its 50-day moving average. That bounce was starting to push shares of APP within range of triggering a big breakout trade above a key downtrend line that was acting as resistance for over a month.
Guess what happened? Shares of American Apparel finally triggered that breakout today after the stock consolidated and hug its 50-day moving average for a few weeks. This stock spiked sharply higher at the open tagging an intraday high of 78 cents per share with massive upside volume. That represents a large gain of 30% for anyone who bought this stock at around 60 cents per share in anticipation of that breakout. As you can see, trading small-cap stocks can lead to massive profits in a very short timeframe.
Traders should continue to watch shares of APP here, since this stock could still be in the early stages of making a much larger move to the upside. The next key resistance levels to watch for a potential breakout trade are at today's intraday high of 81 cents to more resistance at 82 cents per 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. These setups often produce monster moves higher in very short time frames.
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.