This column was originally published on RealMoney on March 7 at 12:00 p.m. EST. It's being republished as a bonus for readers.

Back in the mid-'90s, my online buddies and I formed an alliance we called the Amextadors. Almost every position we bought or sold was a single-digit dog listed on the American Stock Exchange. We loved our secret club and the market niche we had found.

Back then, my favorite Amex stock was Greyhound, a $3 lottery ticket emerging from bankruptcy. There were 1,000-share lots on Computervision, an ill-fated company that went south right out of the IPO gate, and I'll never forget the endless short sales on Griffin Gaming, Merv's seesaw venture with Resorts International.

Indeed, big profits can come in small packages. Though many traders focus on high-priced stocks, lower-priced issues can offer great opportunities. The trick is to keep transaction costs low, trade the right number of shares and pick entry points wisely.

The greatest advantage in trading single-digit stocks lies in the crowd playing them: Retail traders usually guide price movement on these issues, rather than institutions or hedge funds. This adds an element of predictability that's lacking in other speculative arenas.

Rallies and selloffs carry further in these stocks because few analysts follow them, and value is in the eye of the beholder. It's also a fact of life that most small stocks aren't profitable and don't have a lot of money in the bank. As a result, their declines can trigger 50% haircuts with very little trading volume.

Let's look at a handful of single-digit stocks that could head higher in the coming weeks. Keep in mind that some of these issues are trading at new highs, while others are recovering from long downtrends.

I wrote up Qwest ( Q) in January after its huge fourth-quarter rally. Since then, the stock has broken above three-year resistance at $6.15 and is on target to rally up to $8 in the next month or so.

Will that be the end of this dramatic run? My guess is no -- I suspect this chronic underperformer could become one the great recovery stories of 2006.

All sorts of small gold miners are in rally mode these days. Bema Gold ( BGO) broke out to a seven-year high last week in the latest leg of an uptrend that began at $1.70 last year. With the gold commodity rally showing no signs of letting up, these smaller operations should continue to rise in the months ahead.

Yamana Gold ( AUY) is currently trading at a six-year high. The stock is testing key resistance marked by the February peak at $9.13. Though it could pull back at any time to consolidate recent gains, all signs point to a pleasant trip well past $10 in the second quarter.

YM Biosciences ( YMI) is a volatile biotech that jumped off a long base at $3.30 in February and rallied to $5.80 in just four days. The stock then stalled for two weeks and jumped back to its high last Thursday. Price is now constricting at this level, and it could start another rally at any time. The final target is anyone's guess with these single-digit momentum favorites.

Gerdau Ameristeel ( GNA) operates steel mini-mills. The stock came public in August and has nearly doubled in price. It's trading just below $9 after breaking out from monthlong resistance at $7.70. Price is overextended here and could pull back to test that level soon. This decline should mark a low-risk entry for a rally to $10.

AVI BioPharma ( AVII) is a bird-flu play that rallied from $4 to $9 in January and started to move sideways. The developing pattern has the markings of a triangle, with support at $6.70 and resistance at $8.80. The best plan is to sit back and wait for the stock to rally out of this congestion pattern. This would set the stage for a fast move into double digits.

INVESTools ( IED) hit $5.70 in April, dropped into a correction and rallied through this level in January. It shows no interest in pulling back to offer late buyers an easy trade. Entering at these levels might be the only way to get positioned, but traders jumping in should keep tight stop-losses under their positions.

Please note that due to factors including low market capitalization and/or insufficient public float, we consider YM Biosciences and AVI BioPharma to be small-cap stocks. You should be aware that such stocks are subject to more risk than stocks of larger companies, including greater volatility, lower liquidity and less publicly available information, and that postings such as this one can have an effect on their stock prices.

P.S. from Editor-in-Chief, Dave Morrow:
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At the time of publication, Farley was long YM Biosciences and Bema Gold, although holdings can change at any time.

Alan Farley is a professional trader and author of The Master Swing Trader. Farley also runs a Web site called, an online resource for trading education, technical analysis and short-term investment strategies. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Farley appreciates your feedback; click here to send him an email. Also, click here to sign up for Farley's premium subscription product The Daily Swing Trade brought to you exclusively by has a revenue-sharing relationship with Trader's Library under which it receives a portion of the revenue from purchases by customers directed there from