5 Breakout 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 large movers to the upside in the under-$10 complex from Wednesday, including Comstock  (LODE), which exploded higher by 57.1%; Republic Airways  (RJET), which ripped sharply higher by 52.9%; Mines Management  (MGN), which trended up large by 35.9%; and American Apparel  (APP), which soared by 30.2%. 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.

TrueCar


One under-$10 technology player that's starting to spike within range of triggering a major breakout trade is TrueCar  (TRUE), which operates as an Internet-based information, technology, and communication services company. This stock has been destroyed by the sellers over the last six months, with shares down huge by 62.4%.

If you take a glance at the chart for TrueCar you'll see that this recently gapped down sharply lower from over $11 a share to its new 52-week low of $5.77 a share with heavy downside volume. This gap move to the downside came after shares of TrueCar downtrended badly over the last six months, with shares plunging from its high of $20 to its pre-gap low of $9.81 a share. Shares of TrueCar are now starting to rebound off that $5.77 low and off extremely oversold levels, since its current relative strength index reading is 23.4. Oversold can always get more oversold, but it's also an area where a stock can experience a sharp rebound rally to the upside.

Market players should now look for long-biased trades in shares of TrueCar if it manages to break out above some near-term overhead resistance levels at $7 to its gap-down-day high of $7.44 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 1.71 million shares. If that breakout develops soon, then this stock will set up to re-fill some of its recent gap-down-day zone that started near $11 a share.

Traders can look to buy this stock off weakness to anticipate that breakout and simply use a stop that sits right around $6 a share or near that new 52-week low of $5.77 a share. One can also buy shares of TrueCar 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.

Baozun


Another under-$10 services player that's starting to trend within range of triggering a big breakout trade is Baozun  (BZUN), which provides e-commerce solutions for brand partners in the People's Republic of China. This stock has been smacked lower by the sellers over the last three months, with shares off notably by 18.3%.

If you take a look at the chart for Baozun, you'll notice that this stock recently came out of a large downtrend, that saw this stock fall sharply from its May high of $14.77 to its all-time low of $6.65 a share. Following that plunge lower, shares of Baozun have now started to rebound off that $6.65 low, and it's starting to enter a new uptrend. That uptrend can be defined by how this stock has been making higher lows over the last month or so. Shares of Baozun are now starting to spike back above its 20-day moving average of $8.34 a share and it's beginning to move 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 Baozun if it manages to break out above some near-term overhead resistance levels at $8.78 to $9.44 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 1.20 million shares. If that breakout triggers soon, then this stock will set up to re-test or possibly take out its next major overhead resistance levels at $10.50 to $11, or even $11.50 to $12 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 at $8 a share or at $7.47 a share. One can also buy shares of Baozun 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.

Warren Resources


One under-$10 independent energy player that's starting to spike within range of triggering a big breakout trade is Warren Resources  (WRES), which engages in the exploration, development, and production of domestic onshore crude oil and gas reserves. This stock has been smoked by the sellers over the last three months, with shares down sharply by 61.2%.

If you take a glance at the chart for Warren Resources, you'll notice that this stock has been downtrending badly over the last six months, with shares falling sharply lower from its high of around $1.50 to its new 52-week low of 35 cents per share. During that downtrend, shares of Warren Resources have been consistently making lower highs and lower lows, which is bearish technical price action. That said, this stock has now started to stabilize and trend sideways over the last month, with shares moving between 35 cents on the downside and around 43 to 45 cents on the upside. This stock spiked higher on Wednesday back above its 20-day moving average of 39 cents per share and it's now quickly moving within range of triggering a big breakout trade above the upper-end of its recent sideways trending chart pattern.

Traders should now look for long-biased trades in Warren Resources if it manages to break out above some near-term overhead resistance levels at 43 to 45 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 1.35 million 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 50 cents to its 50-day moving average of 56 cents, or even 60 to 65 cents per share.

Traders can look to buy this stock off weakness to anticipate that breakout and simply use a stop that sits right around some near-term support levels at 37 to 35 cents per share. One can also buy shares of Warren Resources 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.

Real Goods Solar


Another under-$10 solar energy player that's starting to move within range of triggering a major breakout trade is Real Goods Solar  (RGSE), which operates as a residential and commercial solar energy engineering, procurement, and construction company in the U.S. This stock has hammered lower by the bears over the last six months, with shares down a massive 82.8%.

If you look at the chart for Real Goods Solar, you'll see that this stock recently formed a double bottom chart pattern at $1.29 to $1.34 a share. This bottom formed after shares of Real Goods Solar downtrended badly off its June high of $4.80 to its new 52-week low of $1.29 a share. Since forming that bottom over the last few weeks, shares of Real Goods Solar have started to trend higher and move back above its 20-day moving average of $1.58 with a number of strong upside volume days. That move has now pushed shares of Real Goods Solar 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 Real Goods Solar if it manages to break out above Wednesday's intraday high of $1.73 to more key resistance at $1.75 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 744,110 shares. If that breakout gets set off soon, then this stock will set up to re-test or possibly take out its next major overhead resistance levels at $2 to its 50-day moving average of $2.31 a share.

Traders can look to buy Real Goods Solar off weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support at $1.48 a share. One can also buy this stock 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.

Cytosorbents

One final under-$10 healthcare player that's starting to move within range of triggering a big breakout trade is Cytosorbents  (CTSO), which engages in the research, development, and commercialization of medical devices with its platform blood purification technology incorporating a proprietary adsorbent polymer technology. This stock has been hit notably by the sellers over the last six months, with shares off by 17.3%.

If you take a glance at the chart for Cytosorbents, you'll notice that this stock has been making higher lows over the last month and change, after this stock flushed lower to $5.17 breaking its previous support at $5.68 a share. Shares of Cytosorbents have now started to spike to the upside back above both its 50-day moving average of $6.31 and its 20-day moving average of $6.39 a share. That move is now starting to push shares of Cytosorbents within range of triggering a big breakout trade above some near-term overhead resistance levels, and a above a key downtrend line that dates back to April.

Traders should now look for long-biased trades in Cytosorbents if it manages to break out above some key near-term overhead resistance levels at $6.64 to just over $7 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 137,584 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 its 200-day moving average of $7.68 to $8.19, or even $8.30 to around $9 a share.

Traders can look to buy Cytosorbents off weakness to anticipate that breakout and simply use a stop that sits right below some near-term support levels at $5.95 to $5.75 a share. One can also buy this stock 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.

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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