3 Under-$10 Stocks 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.

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

NeoPhotonics (NPTN) designs and manufactures photonic integrated circuit-based optoelectronic modules and subsystems for bandwidth-intensive, high-speed communications networks. This stock closed up 4.9% to $4.70 a share in Thursday's trading session.

Thursday's Range: $4.32-$4.72
52-Week Range: $3.89-$9.77
Thursday's Volume: 124,000
Three-Month Average Volume: 148,402

From a technical perspective, NPTN surged notably higher here right above some near-term support at $4.25 with decent upside volume flows. This spike higher on Thursday is starting to push shares of NPTN within range of triggering near-term breakout trade. That trade will hit if NPTN manages to take out Thursday's intraday high of $4.72 to some more near-term overhead resistance at $4.86 with high volume.

Traders should now look for long-biased trades in NPTN as long as it's trending above some near-term support at $4.25 and then once it sustains a move or close above those breakout levels with volume that hits near or above 148,402 shares. If that breakout hits soon, then NPTN will set up to re-test or possibly take out its next major overhead resistance levels at $5.30 to its 50-day moving average of $5.84, or even $6.

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