5 Stocks Under $10 Set to Soar Higher

DELAFIELD, Wis. (Stockpickr) --  Every day on Wall Street, individual stocks trading for $10 a share experience massive spikes higher. Traders savvy enough to follow the low-priced names and trade them with discipline and sod risk management are banking ridiculous coin on a regular basis.

Just take a look at some of the large movers in the under-$10 complex from Wednesday, including Fate Therapeutics  (FATE), which exploded higher by 45.4%; Plasmatech Biopharmaceuticals  (PTBI), which soared higher by 44%; Synthesis Energy Systems  (SYMX), which ripped higher by 30.2%; and MagneGas  (MNGA), which blew up by 29.6%. 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.

Diana Shipping


One under-$10 shipping player that's starting to move within range of triggering a near-term breakout trade is Diana Shipping  (DSX), which transports dry bulk cargoes, including commodities, such as iron ore, coal, grain and other materials in shipping routes worldwide. This stock has been hit by the sellers over the last six months, with shares down 18.5%.

If you take a glance at the chart for Diana Shipping, you'll see that this stock has been uptrending over the last month or so, with shares moving higher from its low of $6.02 to its intraday high on Wednesday of $6.66 a share. During that uptrend, shares of DSX have been making mostly higher lows and higher highs, which is bullish technical price action. Shares of DSX showed relative strength on Wednesday versus the overall market weakness and the stock saw some strong upside volume flows.

Market players should now look for long-biased trades in DSX if it manages to break out above some near-term overhead resistance at $6.68 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 480,356 shares. If that breakout hits soon, then DSX will set up to re-test or possibly take out its next major overhead resistance levels at $7 to $7.09 a share, or even $7.32 to its 200-day moving average of $7.81 a share.

Traders can look to buy DSX off weakness to anticipate that breakout and simply use a stop that sits right below its 50-day moving average of $6.39 a share. One can also buy DSX off strength once it starts to clear $6.68 a share with volume and then simply use a stop that sits a comfortable percentage from your entry point.

Lucas Energy

An under-$10 independent oil and gas player that's quickly moving within range of triggering a major breakout trade is Lucas Energy  (LEI), which is engaged in the acquisition and development of crude oil and natural gas from various formations. This stock has been on fire over the last three months, with shares exploding higher by 119%.

If you take a look at the chart for Lucas Energy, you'll see that this stock has been trending sideways and consolidating over the last month or so, with shares moving between 17 cents on the downside and 25 cents on the upside. Shares of LEI ripped higher on Wednesday and closed back above its 50-day moving average of 21 cents per share. This move is now starting to push shares of LEI within range of triggering a major breakout trade above a key downtrend line that dates back to February.

Market players should now look for long-biased trades in LEI if it manages to take out that downtrend line, which will trigger over 22 cents to 25 cents per 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 971,690 shares. If that breakout materializes soon, then LEI will set up to re-test or possibly take out its next major overhead resistance levels at 30 cents to 35 cents per share, or even 45 cents per share.

Traders can look to buy LEI off weakness to anticipate that breakout and simply use a stop that sits right around some key near-term support at 18 cents per share. One can also buy LEI 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.

Millennial Media

One under-$10 marketing services player that's starting to move within range of triggering a big breakout trade is Millennial Media  (MM), which provides mobile advertising solutions to advertisers and developers in the U.S. and internationally. This stock has been under a bit of selling pressure over the last six months, with shares down by 7.6%.

If you take a glance at the chart for Millennial Media, you'll notice that this stock ripped to the upside on Wednesday right off its 50-day moving average of $1.52 a share with strong upside volume flows. Volume during the session registered over 1 million shares, which is well above its three-month average action of 639,695 shares. That spike is now quickly pushing shares of MM within range of triggering a big breakout trade above a key downtrend line that dates back to last November.

Traders should now look for long-biased trades in MM if it manages to take out that downtrend line, which will trigger over $1.61 to $1.64 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 639,695 shares. If that breakout develops soon, then MM will set up to re-test or possibly take out its next major overhead resistance levels at $1.70 to $1.74 a share, or even $1.80 to $1.93 a share.

Traders can look to buy MM off weakness to anticipate that breakout and simply use a stop that sits right around Wednesday's intraday low of $1.50 a share. One can also buy MM 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.

North Atlantic Drilling

Another under-$10 energy player that's starting to trend within range of triggering a big breakout trade is North Atlantic Drilling  (NADL), which operates as an offshore drilling services contractor in the North Atlantic region. This stock has been smacked lower by the bears over the last six months, with shares down sharply by 71%.

If you look at the chart for North Atlantic Drilling, you'll notice that this stock has been uptrending a bit over the last few weeks, with shares moving higher from its low of $1.30 to its intraday high on Wednesday of $1.65 a share. During that uptrend, shares of NADL have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now started to push shares of NADL within range of triggering a big breakout trade above a key downtrend line that dates back to February.

Market players should now look for long-biased trades in NADL if it manages to bust over that downtrend line, which will trigger above $1.65 to $1.79 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 1.22 million shares. If that breakout triggers soon, then NADL will set up to re-test or possibly take out its next major overhead resistance levels at $2 to $2.40 a share.

Traders can look to buy NADL off weakness to anticipate that breakout and simply use a stop that sits right around some key near-term support levels at $1.50 to $1.40 a share. One can also buy NADL 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.

Yuma Energy


One final under-$10 stock that's quickly trending within range of triggering a major breakout trade is Yuma Energy  (YUMA), which explores for and develops conventional and unconventional oil and gas properties primarily through the use of 3D seismic surveys in the U.S. This stock has been destroyed by the sellers over the six months, with shares down sharply by 70.1%.

If you take a glance at the chart for Yuma Energy, you'll see that this stock has been downtrending badly over the last six months, with shares plunging lower from its high of over $3 a share to its recent low of 88 cents per share. During that downtrend, shares of YUMA have been making mostly lower highs and lower lows, which is bearish technical price action. That said, shares of YUMA spiked modestly higher on Wednesday right above some near-term support at 88 cents per share with strong upside volume flows. That spike is now starting to push shares of YUMA within range of triggering a major breakout trade above some key near-term overhead resistance levels.

Traders should now look for long-biased trades in YUMA if it manages to break out above some key near-term overhead resistance levels at 98 cents per share to around $1.01 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 69,318 shares. If that breakout kicks off soon, then YUMA will set up to re-test or possibly take out its next major overhead resistance levels at its 50-day moving average of $1.14 to $1.17 a share, or even $1.20 to $1.40 a share.

Traders can look to buy YUMA off weakness to anticipate that breakout and simply use a stop that sits right below its new 52-week low of 88 cents per share. One can also buy YUMA 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.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.

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