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 Zoom Technologies (ZOOM), which is skyrocketing higher by 23%; Mandalay Digital Group (MNDL), which is soaring higher by 13%; Codexis (CDXS), which is ripping higher by 9%; and Lucas Energy (LEI), which is spiking higher by 8.5%. 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 skyrocketed higher after I featured it was pharmaceutical retailer and distributor China Jo Jo Drugstores (CJJD), which I highlighted in Jan. 10's "5 Stocks Under $10 Set to Soar" at $1.13 per share. I mentioned in that piece that shares of China Jo Jo Drugstores had been uptrending over the last month and change, with the stock moving higher from its low of 65 cents per share to its recent high of $1.18 a share. That uptrend was quickly pushing shares of CJJD within range of triggering a big breakout trade above some near-term overhead resistance levels at $1.18 a share to some past overhead resistance levels at $1.21 to $1.32 a share.
Guess what happened? Shares of China Jo Jo Drugstores didn't wait long to trigger that breakout, since the stock exploded higher on the same day my article hit the wires. This stock tagged an intraday high on January 10 of $1.90 a share and the volume during that trading session was 2.25 million shares versus its three-month average volume of 147,687 shares. That represents a monster gain of close to 70% in just one trading session for anyone who bought the stock has volume started to pour in and anticipated the breakout. Shares of CJJD might be ready to breakout again if the stock can take out some near-term overhead resistance at $1.50 with strong upside 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.
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.