5 Breakout Stocks Under $10 Set to Soar

 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 Friday, including RadioShack (RSH) , which is ripping higher by 35%; Chinanet Online (CNET) , which is surging to the upside by 23%; Natural Alternatives International (NAII) , which is soaring higher by 17%; and SunLink Health Systems (SSY) , which is trending higher by 15.9%. 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.

Transportadora de Gas Del Sur


One under-$10 gas utilities player that's starting to trend within range of triggering a big breakout trade is Transportadora de Gas Del Sur (TGS) , which operates as a gas transportation company in Latin America. This stock has been on fire so far in 2014, with shares up sharply by 53%.

If you take a glance at the chart for Transportadora de Gas Del Sur, you'll notice that this stock has been uptrending over the last month and change, with shares moving higher from its low of $2.61 to its recent high of $3.40 a share. During that uptrend, shares of TGS have been consistently making higher lows and higher highs, which is bullish technical price action. That move is coming after shares of TGS recent formed a double bottom chart pattern at $2.58 to $2.61 a share. This stock is now quickly moving within range of triggering a big breakout trade above some key near-term overhead resistance levels.

Traders should now look for long-biased trades in TGS if it manages to break out above some near-term overhead resistance levels at $3.40 to $3.45 a share and then above its 52-week high at $3.50 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 303,142 shares. If that breakout develops soon, then TGS will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $4.50 to $5 a share.

Traders can look to buy TGS off weakness to anticipate that breakout and simply use a stop that sits right below its 50-day moving average of $2.97 a share. One can also buy TGS off strength once it starts to bust out above those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

NQ Mobile

Another under-$10 technology player that's starting to trend within range of triggering a big breakout trade is NQ Mobile (NQ) , which  provides mobile Internet services in the areas of mobile security, privacy, productivity, personalized cloud and family protection. This stock has been destroyed by the bears over the last six months, with shares down sharply by 62%.

If you take a look at the chart for NQ Mobile, you'll see that this stock recently formed a triple bottom chart pattern, at $5.56, $5.70 and $5.52 a share. Following that bottom, shares of NQ have now started to spike higher off those support levels and it's beginning to flirt with its 50-day moving average of $6.42 a share. That move is quickly pushing shares of NQ within range of triggering a major breakout trade above some key overhead resistance levels.

Market players should now look for long-biased trades in NQ if it manages to break out above its 50-day moving average of $6.42 a share and then once it clears more key overhead resistance levels at $6.54 to $7.18 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 5.83 million shares. If that breakout triggers soon, then NQ will set up to re-test or possibly take out its next major overhead resistance levels at $8.44 to $9, or even $10 a share.

Traders can look to buy NQ off weakness to anticipate that breakout and simply use a stop that sits right around those triple bottom support levels. One can also buy NQ 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.

Repros Therapeutics


One under-$10 development stage biopharmaceutical player that's starting to move within range of triggering a near-term breakout trade is Repros Therapeutics (RPRX) which  focuses on the development of new drugs to treat hormonal and reproductive system disorders in the U.S. This stock has been hit hard by the bears so far in 2014, with shares off sharply by 46%.

If you take a glance at the chart for Repros Therapeutics, you'll notice that this stock has been absolutely destroyed by the sellers over the last month, with shares downtrending sharply from its high of $22.55 to its new 52-week low of $8.46 a share. During that plunge, shares of RPRX have been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of RPRX have now started to spike higher off that $8.46 low and it's quickly moving within range of triggering a near-term breakout trade. Shares of RPRX are also starting to spike higher off oversold territory, since its relative strength index reading is 30.

Traders should now look for long-biased trades in RPRX if it manages to break out above some near-term overhead resistance levels at $9.68 to $10.17 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 779,965 shares. If that breakout hits soon, then RPRX will set up to experience an oversold rebound that could easily take the stock back towards $12 to $13 a share, or even its 50-day moving average at $14.61 a share.

Traders can look to buy RPRX off weakness to anticipate that breakout and simply use a stop that sits right near its 52-week low of $8.46 a share. One can also buy RPRX 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.

Pernix Therapeutics


Another under-$10 specialty pharmaceutical player that's starting to trend within range of triggering a big breakout trade is Pernix Therapeutics (PTX) , which develops, manufactures, markets, and sells branded and generic pharmaceutical products. This stock has been red hot so far in 2014, with shares up huge so far by 212%.

If you look at the chart for Pernix Therapeutics, you'll see that this stock has been uptrending a bit over the last few weeks, with shares moving higher from its low of $6.83 to its intraday high of $7.88 a share. During that uptrend, shares of PTX have been consistently making higher lows and higher highs, which is bullish technical price action. That uptrend is coming after shares of PTX pulled back from $8.93 to $6.83 a share. Shares of PTX are now quickly moving within range of triggering a near-term breakout trade.

Market players should now look for long-biased trades in PTX if it manages to break out above some near-term overhead resistance level at $7.88 a share with high volume. Look for a sustained move or close above that level with volume that hits near or above its three-month average action of 491,325 shares. If that breakout kicks off soon, then PTX will set up to re-test or possibly take out its next major overhead resistance levels at $8.93 to $9, or even its 52-week high at $9.56 a share.

Traders can look to buy PTX off weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support levels at $7.25 to $6.83 a share. One can also buy PTX 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.

Commercial Vehicle Group


One final under-$10 auto parts player that's trending very close an oversold rebound trade is Commercial Vehicle Group (CVGI) , which manufactures and supplies various cab related products and systems for the commercial vehicle markets in North America, Europe, China, India, and the Asia/Pacific regions This stock has been hit hard by the sellers over the last three months, with shares dropping sharply by 38%.

If you take a glance at the chart for Commerical Vehicle Group, you'll notice that this stock has been downtrending badly for the last three months, with shares falling sharply from its high of $10.91 to its new 52-week low at $6 a share. During that downtrend, shares of CVGI have been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of CVGI have now started to bounce higher off that $6 low and off oversold territory, since its relative strength index reading is currently 26.

Traders should now look for long-biased trades in CVGI if it manages to break out above some near-term overhead resistance levels at $6.50 to just above $6.80 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 135,777 shares. If that breakout develops soon, then CVGI will set up for an oversold rebound trade that could potentially take this stock back towards $7.50 to $8, or even its 50-day moving average of $8.46 a share.

Traders can look to buy CVGI off weakness to anticipate that breakout and simply use a stop that sits right below its new 52-week low of $6 a share. One can also buy CVGI 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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