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 BioFuel (BIOF), which is exploding higher by over 80%; KiOR (KIOR), which soaring higher by 30%; J.C. Penney (JCP), which is ripping to the upside by 24%; and Clean Diesel Technologies (CDTI), which is spiking sharply higher by 13%. 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 exploded to the upside was battery player Highpower International (HPJ), which I highlighted in Feb. 20's "5 Stocks Under $10 Ready to Explode" at around $2.80 per share. I mentioned in that piece that shares of Highpower International had been consolidating and trending sideways for the last four months, with the stock moving between $2.02 on the downside and $3.45 on the upside. That chart pattern had started to tighten up and the stock was quickly moving within range of triggering a big breakout trade above some resistance levels at $2.88 to $2.89 a share.
Guess what happened? Shares of Highpower International didn't wait long to trigger that breakout, since the stock started to challenge those levels the following trading session. Then on Feb. 25 shares of HPJ exploded to the upside with monster upside volume, and the stock tagged an intraday high of $4.98 a share. That represents a gain of over 70% in just a few trading sessions for anyone who bought HPJ in anticipation of the breakout. As you can see, trading breakouts can produce monster gains in very short timeframes when volume buyers move into the stock.
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.