5 Stocks Under $10 Ready to Spike Higher

DELAFIELD, Wis. (Stockpickr) -- There isn't a day that goes by on Wall Street when certain stocks trading for $10 a share don't 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 monster movers to the upside in the under-$10 complex from Thursday, including One Horizon Group  (OHGI), which exploded higher by 112.8%; Rally Software Development  (RALY), which jumped large to the upside by 43.9%; CounterPath  (CPAH), which ripped higher by 30%; and Signal Genetics  (SGNL), which soared higher by 27.5%. 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.

Clean Diesel Technologies


One under-$10 stock that's starting to spike within range of triggering a big breakout trade is Clean Diesel Technologies  (CDTI), which manufactures and distributes light duty vehicle catalysts and heavy duty diesel emissions control systems and products to automakers, distributors, integrators and retrofitters in the U.S., Canada, Sweden and the U.K. This stock has been trending lower over the last six months, with shares down by 10.9%.

If you take a glance at the chart for Clean Diesel Technologies, you'll see that this stock ripped to the upside on Thursday back above both its 50-day and 200-day moving averages with above-average volume. Volume for the day registered over 464,000 shares, which is above its three-month average of 345,043 shares. This move pushed shares of CDTI back above a major downtrend line that started back in February at around $2.40 a share. This high-volume move over that trend line could be signaling that CDTI is ready to make a large move to the upside.

Market players should now look for long-biased trades in CDTI if it manages to take out Thursday's intraday high of $2.04 a share and then above more key resistance levels at $2.12 to $2.17 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 action 345,043 shares. If that move gets started soon, then CDTI will set up to re-test or possibly take out its next major overhead resistance levels at $2.36 to $2.40 a share, or even $2.47 to $2.54 a share. Any high-volume move over $2.54 will then give CDTI a chance to make a run at $2.80 to $3 a share.

Traders can look to buy CDTI off weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support at $1.90 a share. One can also buy CDTI 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.

Rexahn Pharmaceuticals


An under-$10 clinical stage biopharmaceutical player that's starting to trend within range of triggering a major breakout trade is Rexahn Pharmaceuticals  (RNN), which discovers, develops and commercializes treatments for cancer and other medical needs. This stock has been moving to the upside over the last six months, with shares higher by 10%.

If you take a look at the chart for Rexahn Pharmaceuticals, you'll notice that this stock moved modestly to the upside on Thursday right off its 50-day moving average of 72 cents per share and back above its 200-day moving average of 73 cents per share with above-average volume. Volume on the day registered over 720,000 shares, which is well above its three-month average action of 577,015 shares. This move is now starting to push shares of RNN within range of triggering a massive breakout trade above a key downtrend line that dates back to January.

Market players should now look for long-biased trades in RNN if it manages to clear that downtrend line that will start over some resistance levels at 77 to 78 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 volume of 577,015 shares. If that breakout develops soon, then RNN will set up to re-test or possibly take out its next major overhead resistance levels at 81 to 82 cents per share. Any high-volume move above those levels will then give RNN a chance to tag 85 to 95 cents per share.

Traders can look to buy RNN off weakness to anticipate that breakout and simply use a stop that sits right around some key near-term support levels at 70 to 69 cents per share. One can also buy RNN 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.

Ziopharm Oncology


Another under-$10 biotechnology player that's starting to trend within range of triggering a big breakout trade is Ziopharm Oncology  (ZIOP), which employs gene expression, control and cell technologies to deliver cell-based therapies for the treatment of cancer. This stock has been on fire over the last six months, with shares sharply higher by 123.7%.

If you take a glance at the chart for Ziopharm Oncology, you'll notice that this stock has recently been trying to carve out a bottom, with shares finding some buying interest at around $9 to $8.63 a share. This stock has now started to bounce to the upside modestly off those support levels. That bounce is beginning to push shares of ZIOP within range of triggering a big breakout trade above a key downtrend line that dates back to March.

Traders should now look for long-biased trades in ZIOP if it manages to clear that downtrend line which will trigger over $9.95 to around $10 a share and then above its 50-day moving average of $10.50 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 action of 4.32 million shares. If that breakout gets set off soon, then ZIOP will set up to re-test or possibly take out its next major overhead resistance levels at $11.17 to $12.13 a share, or $13.50 to $14.50 a share.

Traders can look to buy ZIOP off weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support levels at $9 to $8.63 a share. One can also buy ZIOP 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.

Cerus


Another under-$10 biomedical products player that's starting to trend within range of triggering a big breakout trade is Cerus  (CERS), which focuses on developing and commercializing the Intercept Blood System to enhance blood safety. This stock has been rising a bit over the last six months, with shares moving up by 8.6%.

If you look at the chart for Cerus, you'll notice that this stock ripped sharply to the upside on Thursday right of its 200-day moving average of $4.57 a share with above-average volume. Volume for that trading session registered over 1.22 million shares, which is just above its three-month average action of 1.08 million shares. That spike has now quickly pushed shares of CERS within range of triggering a big breakout trade above some key near-term overhead resistance levels.

Market players should now look for long-biased trades in CERS if it manages to break out above Thursday's intraday high of $4.95 a share and then above some more important resistance at around $5 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 1.08 million shares. If that breakout gets going soon, then CERS will set up to re-test or possibly take out its next major overhead resistance levels at $5.30 to $5.70 a share, or even $5.86 to $6.30 a share.

Traders can look to buy CERS off weakness to anticipate that breakout and simply use a stop that sits right around its 200-day moving average of $4.57 a share or near more key support at $4.30 a share. One can also buy CERS 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.

Oncolytics Biotech


One final under-$10 development stage biopharmaceutical player that's starting to trend within range of triggering a big breakout trade is Oncolytics Biotech  (ONCY), which focuses on the discovery and development of pharmaceutical products for the treatment of cancers. This stock has dropped modestly over the last three months, with shares moving lower by 3.9%.

If you take a glance at the chart for Oncolytics Biotech, you'll see that this stock has been attempting to carve out a major bottoming chart pattern over the last two months, with shares finding some buying interest at around 69 to 63 cents per share. This stock has now started to creep up just a bit off those support levels and it's beginning to move within range of triggering a big breakout trade above a key downtrend line. That downtrend line dates back to March, so any high-volume move over it could signal that ONCY is ready to make a large move to the upside.

Traders should now look for long-biased trades in ONCY if it manages to break out above that key downtrend line that will trigger over its 200-day at 73 cents and its 50-day at 74 cents per share and then above some major near-term resistance at 80 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 2.11 million shares. If that breakout materializes soon, then ONCY will set up to re-test or possibly take out its next major overhead resistance levels at 90 to 93 cents per share, or even $1 to $1.10 a share.

Traders can look to buy ONCY off weakness to anticipate that breakout and simply use a stop that sits right below 69 cents per share or at 64 cents per share. One can also buy ONCY 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.

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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