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 UniPixel (UNXL), which is exploding higher by 34%; NewLead Holdings (NEWL), which is soaring higher by 26%; Ventrus Biosciences (VTUS), which is surging higher by 20%; and International Tower Hill Mines (THM), which is moving up by 20%. 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 was precious metals player North American Palladium (PAL), which I highlighted in May 16's "5 Stocks Ready to Break Out" at around 25 cents per share. I mentioned in that piece that shares of North American Palladium were downtrending badly for the last month and change, with shares falling from its high of 60 cents per share to its low of 23 cents per share. This stock had just started to stabilize at around 23 cents to 26 cents per share and it was starting to move within range of triggering a big breakout trade above some near-term overhead resistance levels at 26 cents to 27 cents per share.
Guess what happened? Shares of North American Palladium triggered that breakout on May 20 with very strong upside volume flows. Volume on that day registered 16.89 million shares, which is well above its three-month average volume of 5.93 million shares. This stock tagged an intraday high that day of 29 cents per share. Shares of PAL briefly pulled for the following week, and then this stock spiked huge again on May 30 to hit an intraday high of 31 cents per share. That represents a gain of close to 20% if you caught that first or second pop and you bought PAL near 25 cents per share to anticipate the breakout.
Traders should continue to watch shares of PAL here, since this stock is still uptrending off its May low of 23 cents per share and it's still trending within range of triggering a major breakout trade. Traders should look for another sharp move higher in PAL if it can manage to take out some key overhead resistance levels at its 50-day moving average of 31 cents per share to around 32 cents per share with high 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.
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.