DELAFIELD, Wis. (Stockpickr) -- There isn't a day that goes by on Wall Street when certain stocks trading for under $10 a share 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 RADA Electronics (RADA) , which is exploding higher by 81%; Mitek Systems (MITK) , which is soaring by 46%; Acorn International (ATV) , which is ripping higher by 41%; and Technical Communications (TCCO) , which is surging by 30%. You don't even have to catch the entire move in lower-priced stocks such as these to make outsized returns when trading.
One example of an under-$10 stock I flagged recently that exploded to the upside was specialty pharmaceutical player Agile Therapeutics (AGRX) , which I featured in Aug. 28's "5 Breakout Stocks Under $10 Set to Soar" at around $7.50 per share. I mentioned in that piece that shares of Agile Therapeutics recently formed a double bottom chart pattern at $5.56 to $5.80 a share. Following that bottom, shares of AGRX had started to uptrend and spike back above its 50-day moving average. That move was quickly pushing shares of AGRX within range of triggering a near-term breakout trade above some overhead resistance levels at $7.81 to $8 a share.
Guess what happened? Shares of Agile Therapeutics started to trigger that breakout the following trading session with decent upside volume flows. Volume on Sept. 2 registered 155,700 shares, which is well above its three month average action of 118,500 shares. Shares of AGRX have ripped higher since the volume started to come in as it broke above those resistance levels. This stock tagged an intraday high of $10.13 a share on Thursday, which represents a large gain of over 30% in just a few trading sessions. As you can see, trading low-priced stocks that break out with volume can produce large returns in very short time frames.
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.
One under-$10 consumer goods player that's starting to trend within range of triggering a major breakout trade is EveryWare Global (EVRY) , which provides tabletop and food preparation products for the consumer, foodservice, and specialty markets. This stock has been destroyed by the sellers so far in 2014, with shares off huge by 68%.
If you take a glance at the chart for EveryWare Global, you'll notice that this stock been uptrending over the last month, with shares moving higher from its low of $1.95 to its recent high of $3.01 a share. During that move, shares of EVRY have been making mostly higher lows and higher highs, which is bullish technical price action. That move also has shares of EVRY holding above or near its 50-day moving average during that trend.
Traders should now look for long-biased trades in EVRY if it manages to break out above some near-term overhead resistance levels at $3.01 to $3.19 a share and then above more resistance at $3.30 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average action of 743,292 shares. If that breakout materializes soon, then EVRY will set up to re-test or possibly take out its next major overhead resistance levels $3.94 to its 200-day moving average of $4.52 a share.
Traders can look to buy EVRY off weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support levels at $2.26 to right around $2 a share. One can also buy EVRY off strength once it starts to clear those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.