3 Biotech Stocks Under $10 to Trade for Breakouts

DELAFIELD, Wis. (Stockpickr) -- At Stockpickr, we track daily portfolios of stocks that are the biggest percentage gainers and the biggest percentage losers.

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Stocks that are making large moves like these are favorites among short-term traders because they can jump into these names and try to capture some of that massive volatility. Stocks that are making big-percentage moves either up or down are usually in play because their sector is becoming attractive or they have a major fundamental catalyst such as a recent earnings release. Sometimes stocks making big moves have been hit with an analyst upgrade or an analyst downgrade.

Regardless of the reason behind it, when a stock makes a large-percentage move, it is often just the start of a new major trend -- a trend that can lead to huge profits. If you time your trade correctly, combining technical indicators with fundamental trends, discipline and sound money management, you will be well on your way to investment success.

>>Cheap Trades: 5 Breakout Stocks Under $10

With that in mind, let's take a closer look at a several stocks under $10 that are making large moves to the upside.

Sequenom (SQNM), a life sciences company, provides genetic analysis solutions in the U.S. and internationally. This stock closed up 1.6% to $2.40 a share in Tuesday's trading session.

Tuesday's Range: $2.33-$2.43
52-Week Range: $1.65-$4.90
Tuesday's Volume: 1.19 million
Three-Month Average Volume: 1.92 million

From a technical perspective, SQNM spiked modestly higher here right off its 50-day moving average of $2.33 with lighter-than-average volume. This stock has been uptrending a bit over the last few weeks, with shares moving higher from its low of $2.02 to its recent high of $2.46. During that move, shares of SQNM have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of SQNM within range of triggering a big breakout trade. That trade will hit if SQNM manages to take out Tuesday's high of $2.43 to some more near-term overhead resistance at $2.46 with high volume.

Traders should now look for long-biased trades in SQNM as long as it's trending above some key near-term support levels at $2.28 or at $2.20 and then once it sustains a move or close above those breakout levels with volume that hits near or above 1.92 million shares. If that breakout triggers soon, then SQNM will set up to re-test or possibly take out its next major overhead resistance levels at $2.80 to $3, or even $3.25.

Neostem (NBS) develops proprietary cell therapy products. This stock closed up 3% to $7.19 in Tuesdays trading session.

Tuesday's Range: $6.94-$7.23
52-Week Range: $5.00-$9.89
Tuesday's Volume: 367,000
Three-Month Average Volume: 310,500

From a technical perspective, NBS bounced higher here right off its 50-day moving average of $7.03 with above-average volume. This move is quickly pushing shares of NBS within range of triggering a big breakout trade above a key downtrend line. That trade will hit if NBS manages to take out Tuesday's high of $7.22 to some more near-term overhead resistance levels at $7.45 to $7.50 with high volume.

Traders should now look for long-biased trades in NBS as long as it's trending above its 200-day at $6.79 or above more near-term support at $6.67 and then once it sustains a move or close above those breakout levels with volume that hits near or above 310,500 shares. If that breakout comes to fruition soon, then NBS will set up to re-test or possibly take out its next major overhead resistance levels $7.90 to $8.29.

Oncolytics Biotech (ONCY), development stage biopharmaceutical company, focuses on the discovery and development of pharmaceutical products for the treatment of cancers. This stock closed up 2.9% to $1.73 in Tuesday's trading session.

Tuesday's Range: $1.65-$1.75
52-Week Range: $1.45-$3.93
Tuesday's Volume: 414,000
Three-Month Average Volume: 522,007

From a technical perspective, ONCY bounced higher here right off its 50-day moving average of $1.64 with decent upside volume. This move is quickly pushing shares of ONCY within range of triggering a major breakout trade. That trade will hit if ONCY manages to take out some near-term overhead resistance at $1.75 to $1.80 with high volume.

Traders should now look for long-biased trades in ONCY as long as it's trending above its 50-day at $1.64 or above more near-term support at $1.60 and then once it sustains a move or close above those breakout levels with volume that hits near or above 522,007 shares. If that breakout triggers soon, then ONCY will set up to re-test or possibly take out its next major overhead resistance levels at $1.92 to $2. Any high-volume move above $2 will then give ONCY a chance to re-fill some of its previous gap-down-day zone from last November that started at $2.70.

To see more stocks that are making notable moves higher, check out the Stocks Under $10 Moving Higher portfolio on Stockpickr.

-- Written by Roberto Pedone in Delafield, Wis.

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At the time of publication, author had no positions in stocks mentioned. Roberto Pedone, based out of Delafield, Wis., is an independent trader who focuses on technical analysis for small- and large-cap stocks, options, futures, commodities and currencies. Roberto studied international business at the Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany. His work has appeared on financial outlets including CNBC.com and Forbes.com. You can follow Pedone on Twitter at www.twitter.com/zerosum24 or @zerosum24.

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