4 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.

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.

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

Idera Pharmaceuticals

Idera Pharmaceuticals (IDRA), a clinical stage biotechnology company, is engaged in the discovery and development of novel therapeutics that modulate immune responses through toll-like receptors in the U.S. This stock closed up 3.5% to $2.62 in Tuesday's trading session.

Tuesday's Range: $2.45-$2.62
52-Week Range: $1.45-$6.87
Tuesday's Volume: 763,000
Three-Month Average Volume: 1.71 million

From a technical perspective, IDRA bounced notably higher here right above some near-term support at $2.38 with lighter-than-average volume. This stock recently formed a longer-term bottoming chart pattern, since shares found buying interest right above its May low of $2.34. Since holding about that low, shares of IDRA have now started to bounce higher and move within range of triggering a near-term breakout trade. That trade will hit if IDRA manages to take out some key near-term overhead resistance levels at $2.87 to $3.01 with high volume.

Traders should now look for long-biased trades in IDRA as long as it’s trending above Tuesday's intraday of $2.45 or above more near-term support at $2.38 and then once it sustains a move or close above those breakout levels with volume that hits near or above 1.71 million shares. If that breakout begins soon, then IDRA will set up to re-test or possibly take out its next major overhead resistance levels at $3.30 to its 200-day moving average of $3.46, or even $3.50 to $4.

Onconova Therapeutics

Onconova Therapeutics (ONTX), a clinical-stage biopharmaceutical company, focuses on discovering and developing small molecule drug candidates to treat cancer. This stock closed up 2% to $4.99 in Tuesday's trading session.

Tuesday's Range: $4.81-$5.01
52-Week Range: $4.10-$31.13
Tuesday's Volume: 72,000
Three-Month Average Volume: 157,972

From a technical perspective, ONTX jumped notably higher here back above its 50-day moving average of $4.90 with lighter-than-average volume. This stock recently formed a double bottom chart pattern at $4.61 to $4.57. Following that bottom, shares of ONTX have now started to uptrend back above its 50-day and it's quickly moving within range of triggering a big breakout trade. That trade will hit if ONTX manages to take out Tuesday's intraday high of $5.01 to some more near-term overhead resistance at $5.15 with high volume.

Traders should now look for long-biased trades in ONTX as long as it's trending above some near-term support at $4.57 and then once it sustains a move or close above those breakout levels with volume that hits near or above 157,972 shares. If that breakout materializes soon, then ONTX will set up to re-test or possibly take out its next major overhead resistance levels at $5.68 to $5.83, or even $6.27.

Himax Technologies

Himax Technologies (HIMX), a fabless semiconductor company, provides display imaging processing technologies to consumer electronics worldwide. This stock closed up 4.6 % to $6.71 in Tuesday's trading session.

Tuesday's Range: $6.45-$6.88
52-Week Range: $5.57-$16.15
Tuesday's Volume: 9.41 million
Three-Month Average Volume: 5.33 million

From a technical perspective, HIMX gapped up notably higher here right above its 50-day moving average of $6.26 with heavy upside volume flows. This move briefly pushed shares of HIMX into breakout territory, since the stock flirted with some near-term overhead resistance levels at $6.80 to $6.81. Shares of HIMX tagged an intraday high of $6.88, before closing just below that level at $6.71. Shares of HIMX are now quickly moving within range of triggering another significant breakout trade. That trade will hit if HIMX manages to take out Tuesday's intraday high of $6.88 to some more near-term overhead resistance at $6.89 with high volume.

Traders should now look for long-biased trades in HIMX as long as it's trending above Tuesday's intraday low of $6.45 or above its 50-day at $6.26 and then once it sustains a move or close above those breakout levels with volume that hits near or above 5.33 million shares. If that breakout triggers soon, then HIMX will set up to re-test or possibly take out its next major overhead resistance levels at $7.71 to $8.

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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