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 Wednesday, including LiveDeal (LIVE), which skyrocketed higher by 36.7%; Ocean Power Technologies (OPTT), which soared higher by 32.5%; Luna Innovations (LUNA), which ripped higher by 22.8%; and China Gengsheng Minerals (CHGS), which spiked higher by 18.1%. 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 spiked sharply higher after I featured it was technology player Infosonics (IFON), which I highlighted in Feb. 7's "5 Stocks Poised for Breakouts" at around $2.72 per share. I mentioned in that piece that shares of Infosonics had been uptrending strong over the last two months, with shares soaring higher from its low of 66 cents per share to its high of $3.08 a share. That uptrend was quickly pushing shares of IFON within range of triggering a big breakout trade above some near-term overhead resistance levels at $2.90 to its 52-week high at $3.08 a share.
Guess what happened? Shares of Infosonics didn't wait long since the stock started to trigger that breakout the same day as my piece published. This stock tagged an intraday high the following trading session of $3.70 a share, which represents a gain of close to 40%. That's a monster move in just a few days for anyone who loaded up on shares of IFON to anticipate the breakout. I don't think the move higher for IFON is over yet, so traders should now look for much more upside if this stock manages to take out $3.70 a share soon with strong upside volume flows.
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.