5 Breakout Stocks Under $10 Set to Soar Higher

 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 KiOR (KIOR) , which is ripping higher by 25%; Emcore (EMKR) , which is soaring to the upside by 25%; NII Holdings (NIHD) , which is ripping higher by 22%; and Vivus (VVUS) , which is jumping higher by 14.5%. You don't even have to catch the entire move in lower-priced stocks such as these to make outsized returns when trading.

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.

Glu Mobile

One under-$10 multimedia and graphics software player that's starting to trend within range of triggering a big breakout trade is Glu Mobile (GLUU) , which develops and publishes a portfolio of action/adventure and casual games for the smartphones and tablet devices users. This stock has been in play with the bulls over the last three months, with shares up sharply by 34%.

If you take a glance at the chart for Glu Mobile, you'll see that this stock has been trending sideways and consolidating for the last month and change, with shares moving between $4.79 on the downside and $5.65 on the upside. During that sideways trend, shares of GLUU have now started to form higher lows, which demonstrates that buyers are paying up to own shares of GLUU each time it pulls back. This stock is now starting to trend within range of triggering a big breakout trade above the upper-end of its recent sideways trading chart pattern.

Traders should now look for long-biased trades in GLUU if it manages to break out above some near-term overhead resistance levels at $5.35 to $5.53 a share and then above $5.65 to its 50-day moving average of $5.68 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 8.74 million shares. If that breakout develops soon, then GLUU will set up to re-test or possibly take out its next major overhead resistance level just above $6 a share. Any high-volume move above $6.25 will then give GLUU a chance to re-fill its previous gap-down-day zone from July that started at $7 a share.

Traders can look to buy GLUU off weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support levels at $4.88 to $4.79 a share or near its 200-day moving average of $4.61 a share. One can also buy GLUU off strength once it starts to take out those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

Actinium Pharmaceuticals

An under-$10 biotechnology player that's starting to move within range of triggering a near-term breakout trade is Actinium Pharmaceuticals (ATNM) , which develops drugs for the treatment of cancer. This stock has been hit hard by the sellers over the last three months, with shares off sharply by 40%.

If you take a look at the chart for Actinium Pharmaceuticals, you'll see that this stock has formed a major bottoming chart pattern over the last month and change, with shares of ATNM finding buying interest at $5.93, $6.03 and $5.96 a share. Following that bottom, shares of ATNM have started to bounce higher off those support levels and back above its 50-day moving average of $6.55 a share. That move is quickly pushing shares of ATNM within range of triggering a near-term breakout trade above some key overhead resistance levels.

Market players should now look for long-biased trades in ATNM if it manages to break out above some near-term overhead resistance levels at $6.79 to $6.88 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 139,105 shares. If that breakout develops soon, then ATNM will set up to re-test or possibly take out its next major overhead resistance levels at $7.51 to $7.71, or even $7.77 a share. Any high-volume move above those levels will then give ATNM a chance to tag $9 a share.

Traders can look to buy ATNM off weakness to anticipate that breakout and simply use a stop that sits right below $6 a share. One can also buy ATNM 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.

Spectrum Pharmaceuticals

Another under-$10 biotechnology player that's starting to move within range of triggering a near-term breakout trade is Spectrum Pharmaceuticals (SPPI) which develops and commercializes oncology and hematology drug products. This stock has traded off a bit so far in 2014, with shares off by 7.3%.

If you take a glance at the chart for Spectrum Pharmaceuticals, you'll see that this stock has been uptrending over the last month and change, with shares moving higher from its low of $6.75 to its recent high of $8.50 a share. During that uptrend, shares of SPPI have been making mostly higher lows and higher highs, which is bullish technical price action. This move has now pushed shares of SPPI within range of triggering a near-term breakout trade above some key overhead resistance levels.

Traders should now look for long-biased trades in SPPI if it manages to break out above some near-term overhead resistance levels at $8.25 to $8.50 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 volume of 1.07 million shares. If that breakout gets underway soon, then SPPI will set up to re-test or possibly take out its next major overhead resistance levels at $9.27 to its 52-week high at $10.32 a share. Any high-volume move above $10.32 will then give SPPI a chance to re-fill some of its previous gap-down-day zone from March of 2013 that started at $12.47 a share.

Traders can look to buy SPPI off weakness to anticipate that breakout and simply use a stop that sits right below its recent double bottom support levels at $7.82 to $7.81 a share or right below its 50-day moving average of $7.69 a share. One can also buy SPPI 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.

Athersys

Another under-$10 biotechnology player that's starting to trend within range of triggering a big breakout trade is Athersys (ATHX) , which focuses on the research and development activities in the field of regenerative medicine. This stock has been destroyed by the bears over the last six months, with shares off sharply by 62%.

If you look at the chart for Athersys, you'll see that this stock has been downtrending badly for the last two months and change, with shares moving lower from its high of $1.99 to its recent low of $1.31 a share. During that downtrend, shares of ATHX have been making mostly lower highs and lower lows, which is bearish technical price action. That said, shares of ATHX are now starting to bounce off some near-term support at $1.31 and it's now starting to trend within range of triggering a big breakout trade above some near-term overhead resistance levels.

Market players should now look for long-biased trades in ATHX if it manages to break out above some near-term overhead resistance levels at $1.40 to $1.49 a share and then back above its 50-day moving average of $1.52 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 384,325 shares. If that breakout hits soon, then ATHX will set up to re-test or possibly take out its next major overhead resistance levels at $1.70 to $1.78 a share, or even $1.99 a share.

Traders can look to buy ATHX off weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support at $1.31 a share. One can also buy ATHX off strength once it starts to bust above those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

First Bancorp

One more under-$10 stock that's trending very close to triggering a big breakout trade is First Bancorp (FBP) , which operates as the bank holding company for FirstBank Puerto Rico that provides a range of financial products and services to retail, commercial, and institutional clients. This stock is off to a slow start so far in 2014, with shares off by 15%.

If you take a glance at the chart for First Bancorp, you'll notice that this stock is spiking higher today back above its 50-day moving average of $5.17 a share and right into its 200-day moving average of $5.31 a share. This spike is quickly pushing shares of FBP within range of triggering a major breakout trade above a key downtrend line that dates back to mid-June.

Traders should now look for long-biased trades in FBP if it manages to break out above some near-term overhead resistance levels at $5.40 to $5.60 a share and then above $5.74 to $5.89 a share with high volume. Look for a sustained move or close above those levels with volume that registers near or above its three-month average action of 737,338 shares. If that breakout triggers soon, then FBP will set up re-test or possibly take out its next major overhead resistance levels at $6.27 to $6.56 a share, or even $7 to $7.50 a share.

Traders can look to buy FBP off weakness to anticipate that breakout and simply use a stop that sits right below some near-term support levels at $5.01 to $4.97 a share. One can also buy FBP 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.

To see more hot under-$10 equities, check out the Stocks Under $10 Setting Up to Explode 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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