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.

Novatel Wireless (NVTL) provides wireless broadband access solutions for the mobile communications market worldwide. This stock closed up 7.4% to $2.02 in Tuesday's trading session.

Tuesday's Range: $1.82-$2.05
52-Week Range: $1.51-$4.43
Tuesday's Volume: 156,000
Three-Month Average Volume: 180,882

From a technical perspective, NVTL ripped sharply higher here right above its 50-day moving average of $1.78 with decent upside volume flows. This sharp spike higher on Tuesday is quickly pushing shares of NVTL within range of triggering a near-term breakout trade. That trade will hit if NVTL manages to take out some key overhead resistance levels at $2.11 to $2.18 and then once it clears is 200-day moving average of $2.25 with high volume.

Traders should now look for long-biased trades in NVTL as long as it's trending above its 50-day at $1.78 and then once it sustains a move or close above those breakout levels with volume that hits near or above 180,882 shares. If that breakout materializes soon, then NVTL will set up to re-fill some of its previous gap-down-day zone from March that started at $2.85.

LeapFrog Enterprises (LF) designs, develops, and markets technology-based learning products and related proprietary content for children worldwide. This stock closed up 1.9% to $7.71 in Tuesday's trading session.

Tuesday's Range: $7.48-$7.85
52-Week Range: $6.10-$11.95
Thursday's Volume: 1.45 million
Three-Month Average Volume: 830,318

From a technical perspective, LF jumped modestly higher here right above some near-term support at $7.40 with strong upside volume flows. This spike higher on Tuesday pushed shares of LF into breakout territory, since the stock took out its 200-day moving average of $7.69 to some more near-term overhead resistance at $7.69. Shares of LF are now quickly moving within range of triggering another big breakout trade. That trade will hit if LF manages to clear more key overhead resistance levels at $7.87 to $8 with high volume.

Traders should now look for long-biased trades in LF as long as it's trending above some near-term support levels at $7.40 to $7.26 or its 50-day at $7.12 and then once it sustains a move or close above those breakout levels with volume that hits near or above 830,318 shares. If that breakout materializes soon, then LF will set up to re-test or possibly take out its next major overhead resistance levels at $8.80 to $9, or even $9.31.

Silver Standard Resources (SSRI) is engaged in the acquisition, exploration, development, and operation of silver and silver resource dominant mineral projects principally in the Americas. This stock closed up 1.9% to $8.86 in Tuesday's trading session.

Tuesday's Range: $8.62-$8.97
52-Week Range: $5.18-$12.21
Tuesdays Volume: 1.55 million
Three-Month Average Volume: 1.19 million

From a technical perspective, SSRI jumped modestly higher here right above some near-term support at $8.50 with above-average volume. This stock has been uptrending strong for the last month, with shares moving higher from its low of $6.28 to its recent high of $9.08. During that uptrend, shares of SSRI have been consistently making higher lows and higher highs, which is bullish technical price action. This bump higher on Tuesday is starting to push shares of SSRI within range of triggering a big breakout trade. That trade will hit if SSRI manages to take out Tuesday's intraday high of $8.97 to some more near-term overhead resistance at $9.08 with high volume.

Traders should now look for long-biased trades in SSRI as long as it's trending above support near $8.50 or above its 50-day at $8.11 and then once it sustains a move or close above those breakout levels with volume that hits near or above 1.19 million shares. If that breakout triggers soon, then SSRI will set up to re-test or possibly take out its next major overhead resistance levels at $9.50 to $10, or even $10.50 to $11.

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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