5 Stocks Under $10 Set to Soar: Venaxis, McDermott and More

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 Wednesday, including Angie's List (ANGI) , which exploded higher by 59%; Cyclacel Pharmaceuticals (CYCC) , which soared higher by 32%; Zuoan Fashion Ltd (ZA) , which spiked sharply higher by 29%; and Emerson Radio (MSN) , which blazed a trail to the upside by 27%. 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.

Acasti Pharma


One under-$10 biopharmaceutical player that's starting to move within range of triggering a big breakout trade is Acasti Pharma (ACST) , which is engaged in the research, development and commercialization of therapies for abnormalities in blood lipids, and the treatment and prevention of various cardiometabolic disorders in Canada and the U.S. This stock has been driven lower by the sellers over the last six months, with shares down sharply by 47%.

If you take a glance at the chart for Acasti Pharma, you'll see that this stock has been attempting to carve out a major bottoming chart pattern over the last two months and change, with shares finding buying interest each time it has pulled back to around 40 cents per share. Shares of ACST have now started to spike higher off those support levels and it's beginning to trend within range of triggering a big breakout trade above a key downtrend line.

Traders should now look for long-biased trades in ACST if it manages to break out above its 50-day moving average of 49 cents per share and then above some more key overhead resistance at 52 cents per 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 146,508 shares. If that breakout gets going soon, then ACST will set up to re-test or possibly take out its next major overhead resistance levels at 62 to 68 cents per share, or even its 200-day moving average of 74 cents per share.

Traders can look to buy ACST off weakness to anticipate that breakout and simply use a stop that sits right below some major near-term support at around 40 cents per share. One can also buy ACST 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.

Arotech

An under-$10 industrial goods player that's starting to move within range of triggering a big breakout trade is Arotech (ARTX) , which provides defense and security products and services. This stock has been on the upswing over the last three months, with shares moving higher by around 19%.

If you take a look at the chart for Arotech, you'll see that this stock has been uptrending over the last three months, with shares moving higher from its low of $2.02 to its recent high of $2.75 a share. During that uptrend, shares of ARTX have been making mostly higher lows and higher highs, which is bullish technical price action. Shares of ARTX broke out on Wednesday above some near-term overhead resistance at $2.57 a share with above-average volume. Volume on the day finished at over 296,000 shares, which is just above its three-month average action of 237,144 shares. That move is now quickly pushing shares of ARTX within range of triggering another big breakout trade.

Market players should now look for long-biased trades in ARTX if it manages to break out above some key near-term overhead resistance at $2.75 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 237,144 shares. If that breakout develops soon, then ARTX will set up to re-test or possibly take out its next major overhead resistance levels at $3.20 a share to its 200-day moving average of $3.24 a share. Any high-volume move above those levels will then put $3.50 to $4 a share into focus for shares of ARTX.

Traders can look to buy ARTX off weakness to anticipate that breakout and simply use a stop that sits right around some near-term support levels at $2.33 to $2.18 a share. One can also buy ARTX 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.

Conatus Pharmaceuticals

One under-$10 biotechnology stock that's quickly moving within range of triggering a near-term breakout trade is Conatus Pharmaceuticals (CNAT) which focuses on the development and commercialization of novel medicines to treat liver diseases in the U.S. This stock has been under pressure by the sellers over the last three months, with shares off notably by 14%.

If you take a glance at the chart for Conatus Pharmaceuticals, you'll notice that this stock recently gapped down sharply lower from around $11 a share to around $6 a share with strong downside volume flows. Following that move, shares of CNAT have started to stabilize and trend slighter higher, with the stock moving up from its low of $5.22 a share to its high of $6.18 a share. Shares of CNAT are now starting to trend within range of triggering a near-term breakout trade above a key downtrend line and above some significant overhead resistance levels.

Traders should now look for long-biased trades in CNAT if it manages to break out above some key near-term overhead resistance levels at $6.17 to $6.18 a share and then above its gap-down-day high from January at $6.80 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 688,012 shares. If that breakout triggers soon, then CNAT will set up to re-fill some of its previous gap-down-day zone that started near $11 a share.

Traders can look to buy CNAT off weakness to anticipate that breakout and simply use a stop that sits around some near-term support levels at $5.54 to $5.53 a share, or near its recent low of $5.22 a share. One can also buy CNAT off strength once it starts to move above those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

Venaxis


Another under-$10 diagnostic substances player that's starting to trend within range of triggering a major breakout trade is Venaxis (APPY) , which develops and commercializes products for unmet diagnostic and therapeutic needs. This stock has been destroyed by the sellers over the last six months, with shares down sharply by 74%

If you look at the chart for Venaxis, you'll see that this stock just gapped down sharply lower in last January from around $2 a share to under 60 cents per share with heavy downside volume. Following that move, shares of APPY went on to make a new 52-week low of 40 cents per share. Since tagging that new low, shares of APPY have started to stabilize a bit with the stock moving slightly higher from 40 cents per share to its recent high of around 49 cents per share. Shares of APPY are now starting to trend within range of triggering a major breakout trade above some key near-term overhead resistance levels.

Market players should now look for long-biased trades in APPY if it manages to break out above some key near-term overhead resistance levels at 50 cents to around 55 cents per share and then above its gap-down-day high from late January at 63 cents per 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 494,003 shares. If that breakout materializes soon, then APPY will set up to re-fill some of its previous gap-down-day zone from late January that started near $2 a share.

Traders can look to buy APPY off weakness to anticipate that breakout and simply use a stop that sits right below its new 52-week low of 40 cents per share. One can also buy APPY off strength once it starts to trend above those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

McDermott International


One final under-$10 energy player that's starting to trend within range of triggering a major breakout trade is McDermott International (MDR) , which operates as an engineering, procurement, construction, and installation (EPCI) company worldwide. This stock has been annihilated by the sellers over the last six months, with shares down huge by 62%.

If you take a glance at the chart for McDermott International, you'll see that this stock recently formed a major bottoming chart pattern at $2.10 to $2.13 a share. Following that bottom, shares of MDR have started to spike higher and this stock is now trending back above its 50-day moving average of $2.61 a share. Shares of MDR spiked higher on Wednesday right off its 50-day moving average and it's now moving within range off triggering a major breakout trade above some key near-term overhead resistance levels.

Traders should now look for long-biased trades in MDR if it manages to break out above some key near-term overhead resistance levels at $2.82 to $2.88 a share and then above near-term resistance levels at $3.07 to $3.16 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 5.98 million shares. If that breakout kicks off soon, then MDR will set up re-test or possibly take out its next major overhead resistance levels at $3.60 to $4.35 a share, or even $4.50 to $5 a share.

Traders can look to buy MDR off weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support levels at $2.53 to $2.40 a share, or even down near those double bottom support levels. One can also buy MDR 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.

-- Written by Roberto Pedone in Delafield, Wis.

Follow Stockpickr on Twitter and become a fan on Facebook.

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.

More from Investing

Video: Jim Cramer on Netflix, Disney, Intel, Micron and Goldman Sachs

Video: Jim Cramer on Netflix, Disney, Intel, Micron and Goldman Sachs

Micron's Upbeat Guidance Is Getting a Thumbs-Up From Investors

Micron's Upbeat Guidance Is Getting a Thumbs-Up From Investors

Jim Cramer Weighs In on Intel CEO Resignation

Jim Cramer Weighs In on Intel CEO Resignation

Jim Cramer: I Think Deregulation Will Produce Very Good Earnings for Banks

Jim Cramer: I Think Deregulation Will Produce Very Good Earnings for Banks

Proctor & Gamble Worth 40% More Broken Up?

Proctor & Gamble Worth 40% More Broken Up?