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 Wednesday, including China Shengda Packaging (CPGI), which exploded higher by 40.7%; Oragenics (OGEN), which soared higher by 38.6%; Andatee China Marine Fuel (AMCF), which spiked sharply higher by 35%; and Opexa Therapeutics (OPXA), which ripped higher by 24.9%. 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.
China Ming Yang Wind Power Group
One under-$10 industrial goods player that's starting to trend within range of triggering a near-term breakout trade is China Ming Yang Wind Power (MY), which designs, manufactures, sells, and services megawatt-class wind turbines in the People's Republic of China. This stock has been exploding to the upside over the last three months, with shares sharply higher by 49%.
If you take a glance at the chart for China Ming Yang Wind Power, you'll see that this stock has been uptrending a bit during the month of June, with shares moving higher from its low of $3 to its recent high of $3.29 a share. During that uptrend, shares of China Ming Yang Wind Power Group have been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed this stock 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 shares of China Ming Yang Wind Power if it manages to break out above some near-term overhead resistance levels at $3.29 to around $3.40 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 983,275 shares. If that breakout hits soon, then this stock will set up to re-test or possibly take out its next major overhead resistance levels at $3.64 to $3.82 a share, or even its 52-week high of $3.88 to $4.34 a share.
Traders can look to buy this stock off weakness to anticipate that breakout and simply use a stop that sits just below some key near-term support levels at 3.06 to $3 a share. One can also buy shares of China Ming Yang Wind Power off strength once it takes out those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.