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.

MediWound

MediWound (MDWD) , an integrated biopharmaceutical company, focuses on developing, manufacturing, and commercializing products for the treatment of severe burns, chronic and other hard-to-heal wounds, and connective tissue disorders. This stock closed up 7% to $7.33 a share in Thursday's trading session.

Thursday's Range: $6.80-$7.55
52-Week Range: $6.68-$19.31
Thursday's Volume: 69,000
Three-Month Average Volume: 47,909

From a technical perspective, MDWD spiked sharply higher here right above its all-time low of $6.68 with above-average volume. This stock has been downtrending badly for the last three months and change, with shares moving lower from its high of $12.75 to that low of $6.68. During that move, shares of MDWD have been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of MDWD have now formed a double bottom at $6.80 to $6.68 and it's quickly moving within range of triggering a near-term breakout trade. That trade will hit if MDWD manages to take out Thursday's intraday high of $7.55 to some more near-term overhead resistance at $8 with high volume.

Traders should now look for long-biased trades in MDWD as long as it's trending above its all-time low of $6.68 and then once it sustains a move or close above those breakout levels with volume that hits near or above 47,909 shares. If that breakout triggers soon, then MDWD will set up to re-test or possibly take out its next major overhead resistance levels at its 50-day moving average of $8.54 to $8.70. Any high-volume move above those levels will then give MDWD a chance to tag $10 to $10.50.

Siga Technologies

Siga Technologies (SIGA) is engaged in the development and commercialization of pharmaceutical solutions for serious unmet medical needs and biothreats. This stock closed up 5.8% to $1.46 in Thursday's trading session.

Thursday's Range: $1.33-$1.48
52-Week Range: $1.22-$4.15
Thursday's Volume: 395,000
Three-Month Average Volume: 375,230

From a technical perspective, SIGA ripped sharply higher here right above some near-term support at $1.31 with above-average volume. This sharp spike to the upside on Thursday is now quickly pushing shares of SIGA within range of triggering a major breakout trade. That trade will hit if SIGA manages to clear Thursday's intraday high of $1.48 to some more near-term overhead resistance at $1.52 with high volume.

Traders should now look for long-biased trades in SIGA as long as it's trending above some near-term support at $1.31 and then once it sustains a move or close above those breakout levels with volume that hits near or above 375,230 shares. If that breakout triggers soon, then SIGA will set up to re-test or possibly take out its next major overhead resistance levels at around $1.70 to its gap-down-day high from August at just over $2.

Senomyx

Senomyx (SNMX) discovers, develops, and commercializes flavor ingredients for the packaged food, beverage, and ingredient supply industries using proprietary taste receptor-based assays and screening technologies. This stock closed up 6.9% to $9.67 in Thursday's trading session.

Thursday's Range: $8.85-$9.76
52-Week Range: $3.27-$12.74
Thursday's Volume: 1.09 million
Three-Month Average Volume: 576,608

From a technical perspective, SNMX ripped sharply higher here with strong upside volume flows. This stock has been uptrending for the last month and change, with shares moving higher from its low of $6.42 to its intraday high of $9.76. During that move, shares of SNMX have been consistently making higher lows and higher highs, which is bullish technical price action. This move has now pushed shares of SNMX within range of triggering a big breakout trade. That trade will hit if SNMX manages to clear Thursday's intraday high of $9.76 to some more past resistance at $9.98 with high volume.

Traders should now look for long-biased trades in SNMX as long as it's trending above Thursday's intraday low of $8.85 and then once it sustains a move or close above those breakout levels with volume that hits near or above 576,608 shares. If that breakout kicks off soon, then SNMX will set up to re-test or possibly take out its next major overhead resistance levels at $11.50 to $ 12.44, or even its 52-week high at $12.74.

Xoma

Xoma (XOMA) discovers and develops antibody-based therapeutics in the U.S., Europe, and the Asia Pacific. This stock closed up 7.1% to $4.85 in Thursday's trading session.

Thursday's Range: $4.45-$4.85
52-Week Range: $3.42-$9.57
Thursday's Volume: 2.71 million
Three-Month Average Volume: 1.42 million

From a technical perspective, XOMA ripped sharply higher here right above its 50-day moving average of $4.21 with above-average volume. This stock has been uptrending for the last two months, with shares moving higher from its low of $3.66 to its recent high of $4.91. During that move, shares of XOMA have been consistently making higher lows and higher highs, which is bullish technical price action. This move higher on Thursday is now pushing shares of XOMA within range of triggering a big breakout trade. That trade will hit if XOMA manages to clear some key overhead resistance levels at $4.91 to $4.95 to $5 to $5.04 with high volume.

Traders should now look for long-biased trades in XOMA as long as it's trending above its 50-day at $4.21 or above more near-term support at $4 and then once it sustains a move or close above those breakout levels with volume that hits near or above 1.42 million shares. If that move begins soon, then XOMA will set up to re-test or possibly take out its next major overhead resistance levels at its 200-day moving average of $5.39 to $5.54. Any high-volume move above $5.54 will then give XOMA a chance to tag its next major overhead resistance level at $6.45.

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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