5 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 $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 Synergy Pharmaceuticals  (SGYP), which exploded to the upside by 67%; Joe's Jeans  (JOEZ), which ripped higher by 48.6%; Silver Bull Resources  (SVBL), which trended sharply higher by 37.9%; and Axion Power International  (AXPW), which jumped up by 24.1%. 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.

Nanosphere


One under-$10 health care player that's starting to move within range of triggering a big breakout trade is Nanosphere  (NSPH), which develops, manufactures and markets molecular diagnostic tests that can lead to earlier disease detection, optimal patient treatment and enhanced health care economics. This stock has been smacked lower by the sellers over the last six months, with shares down large by 51%.

If you take a glance at the chart for Nanosphere, you'll see that this stock has been downtrending over the last three months, with shares dropping from over $6 a share to its recent low of $3.20 a share. During that downtrend, shares of Nanosphere have been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of Nanosphere have been attempting to carve out a bottom over the last few weeks, with the stock finding buying interest around $3.30 to $3.20 a share. This stock has now started to modestly bounce off those levels and it's beginning to move within range of triggering a big breakout trade above a key downtrend line.

Market players should now look for long-biased trades in shares of Nanosphere if it manages to break out above a key downtrend line that will trigger over $3.50 to $3.80 a share and then above more resistance at $3.80 to $4 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 137,555 shares. If that breakout kicks off soon, then this stock will set up to re-test or possibly take out its next major overhead resistance levels at $4.17 to $4.87 a share, or even $5 to $5.80 a share.

Traders can look to buy this stock off weakness to anticipate that breakout and simply use a stop that sits just right around some key near-term support levels at $3.30 to $3.20 a share. One can also buy shares of Nanosphere off strength once it clears those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

Netlist


An under-$10 technology player that's quickly moving within range of triggering a major breakout trade is Netlist  (NLST), which designs, manufactures and sells a range of logic-based memory subsystems for the datacenter, storage and high-performance computing markets worldwide. This stock has been hammered lower by the sellers over the last three months, with shares off sharply by 49%.

If you take a look at the chart for Netlist, you'll notice that this stock has carved out a major bottoming chart pattern over the last two months and change, with shares finding buying interest each time it traded close to 50 cents per share. This stock has now started to spiked higher off those support levels and it's now trending back above its 50-day moving average. That spike is now quickly pushing shares of Netlist 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 Netlist if it manages to break out above some key near-term overhead resistance levels at 63 to 64 cents per share and then above 76 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 of 508,803 shares. If that breakout triggers soon, then this stock will set up to re-fill some of its previous gap-down-day zone from March that started at $1.40 a share.

Traders can look to buy this stock off weakness to anticipate that breakout and simply use a stop that sits right around some key near-term support levels at 53 cents to 50 cents per share. One can also buy shares of Netlist 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.

Fortress Biotech


One under-$10 biopharmaceutical player that's starting to spike within range of triggering a near-term breakout trade is Fortress Biotech  (FBIO), which develops novel immunotherapy agents for the treatment of autoimmune diseases and cancer. This stock has been on fire over the last six months, with shares ripping higher by 54.4%.

If you take a glance at the chart for Fortress Biotech, you'll notice that this stock soared sharply higher on Wednesday right off its 200-day moving average of $2.59 a share and off some previous support at around $2.50 a share with strong upside volume flows. This move higher on Wednesday came after a large flush to the downside in early trading, and shares of Fortress Biotech then manage to close strong right near its intraday highs. This stock is now poised to triggering a near-term breakout trade above some key overhead resistance levels.

Traders should now look for long-biased trades in Fortress Biotech if it manages to break out above some key near-term overhead resistance levels at $3.30 to its 50-day moving average of $3.36 a share and then above more resistance at $3.45 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 206,049 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 $4.25 to $4.50 a share, or even $5.35 a share.

Traders can look to buy this stock off weakness to anticipate that breakout and simply use a stop that sits right below some key support levels at $2.60 to $2.50 a share. One can also buy shares of Fortress Biotech 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.

Speed Commerce


Another under-$10 technology services player that's starting to trend within range of triggering a major breakout trade is Speed Commerce  (SPDC), which provides e-commerce and fulfillment services to retailers and manufacturers in the U.S. and Canada. This stock has been destroyed by the sellers over the last six months, with shares down huge by 89.9%.

If you look at the chart for Speed Commerce, you'll notice that this stock has recently come out of a major downtrend, that took this name from over its high in January around $2.80 to its May low of 19 cents per share. During that downtrend, shares of Speed Commerce have been consistently making lower highs and lower lows, which is bearish technical price action. That said, this stock has now started to reverse that downtrend in the short-term, with the stock moving higher from that 19 cents low to its recent high of 33 cents per share. That new uptrend is now starting to push shares of Speed Commerce within range of triggering a major breakout trade above a key downtrend line.

Market players should now look for long-biased trades in Speed Commerce if it manages to break out above a key downtrend line that will start to trigger over 31 to 33 cents per share and then above 36 to 38 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 volume of 1.37 million shares. If that breakout materializes soon, then this stock will set up to re-test or possibly take out its next major overhead resistance levels at 50 to 60 cents per share, or even 70 to 80 cents per share.

Traders can look to buy Speed Commerce off weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support levels at 26 to 24 cents per share. One can also buy this stock 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.

Vaalco Energy


One final under-$10 independent energy player that's starting to spike within range of triggering a big breakout trade is Vaalco Energy  (EGY), which acquires, explores for, develops, and produces crude oil and natural gas in the U.S. This stock has been hammered lower by the sellers over the last three months, with shares dropping sharply by 34.8%.

If you take a glance at the chart for Vaalco Energy, you'll see that this stock has been consolidating and basing for the last two months and change, with shares moving between $2 on the downside and $2.68 on the upside. Shares of Vaalco Energy have started to make higher lows and some higher highs over the last month or so, after flushing to the downside and breaking to a new low in May at $2 a share. This shorter-term uptrend is now starting to push shares of Vaalco Energy within range of triggering a big breakout trade above the upper-end of its recent sideways trending chart pattern. That breakout, if it triggers, will also push this stock back above a key downtrend line that dates back to March.

Traders should now look for long-biased trades in Vaalco Energy if it manages to clear that downtrend line that will trigger over $2.40 to $2.50 a share and then above $2.68 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 1.62 million shares. If that breakout gets started soon, then this stock will set up to re-test or possibly take out its next major overhead resistance levels $3 to $3.37 a share, or even $4 to $4.50 a share.

Traders can look to buy Vaalco Energy off weakness to anticipate that breakout and simply use a stop that sits right around some key near-term support levels at $2.15 to $2.06 a share or down near that May low at $2 a share. One can also buy this stock off strength once it starts to bust above 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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