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

Just take a look at some of the big movers to the upside in the under-$10 complex from Wednesday, including Lincoln Educational Services (LINC - Get Report) , which exploded by 46.5%; Genetic Technologies (GENE) , which ripped up by 37.9%; Tantech Holdings (TANH) , which soared by 31.3%; and BioScrip (BIOS) , which spiked by 26.4%. 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 stocks, I do it almost entirely based off of the charts and technical analysis. I also like to find under-$10 stocks 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.

BioDelivery Sciences


One under-$10 specialty pharmaceutical player that's starting to trend within range of triggering big breakout trade is BioDelivery Sciences  (BDSI - Get Report) , which engages in the development and commercialization of pharmaceutical products principally in the areas of pain management and addiction. This stock has been under selling pressure over the last six months, with shares off by 24.3%.

If you take a glance at the chart for BioDelivery Sciences, you'll notice that this stock has been uptrending a bit over the last few weeks, with shares moving higher off its low of $4.91 a share to its intraday high on Wednesday of $6.25 a share. During that uptrend, shares of BioDelivery Sciences 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 major breakout trade above a key downtrend line that dates back to July.

Market players should now look for long-biased trades in shares of BioDelivery Sciences if it manages to break out above that key downtrend line that will trigger over $6.38 to $6.50 a share and then above more resistance at $7.04 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 1.81 million shares. If that breakout develops soon, then this stock will set up to re-test or possibly take out its next major overhead resistance levels at $7.79 to $8.50, or even its 200-day moving average of $9.19 to $10 a share.

Traders can look to buy this stock off weakness to anticipate that breakout and simply use a stop that sits right under some key near-term support at $5.50 a share. One can also buy shares of BioDelivery Sciences 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.

Imprivata


Another under-$10 health care information services player that's starting to move within range of triggering a major breakout trade is Imprivata  (IMPR) , which provides authentication and access management technology solutions for the healthcare industry in the U.S., the U.K., and internationally. This stock has been smacked lower by the sellers over the last six months, with shares down sharply by 32.5%.

If you take a look at the chart for Imprivata, you'll notice that this stock gapped down sharply lower in October from around $18 a share to just under $10 a share with massive downside volume flows. Following that move, shares of Imprivata continued to slide lower with the stock printing a new all-time low of $9 a share. This stock has now entered extremely oversold territory, since its current relative strength index reading is 24.2. Oversold can always get more oversold, but it's also an area where a stock can make a powerful bounce higher from. Shares of Imprivata have now started to spike higher off that $9 low and it's now quickly moving within range of triggering a major breakout trade.

Market players should now look for long-biased trades in Imprivata if it manages to break out above some key near-term overhead resistance levels at $10 to $10.06 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 344,672 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 $11 to $12 a share. Any high-volume move above $12 a share will then give this stock a chance to re-fill some of its previous gap-down-day zone that started near $18 a share.

Traders can look to buy this stock off weakness to anticipate that breakout and simply use a stop that sits right around its new all-time low of $9 a share. One can also buy shares of Imprivata 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.

Nivalis Therapeutics

One under-$10 clinical stage pharmaceutical player that's starting to spike within range of triggering a major breakout trade is Nivalis Therapeutics  (NVLS) , which focuses on the discovery, development and commercialization of product candidates for patients with cystic fibrosis. This stock has been destroyed by the sellers over the last six months, with shares off large by 41.4%.

If you take a glance at the chart for Nivalis Therapeutics, you'll notice that this stock recently formed a double bottom chart pattern, after shares found some buying interest at $7.59 to $7.63 a share. Following that bottom, shares of Nivalis Therapeutics have started to rebound higher with the stock moving back above its 20-day moving average of $8.36 a share. That rebound is now quickly pushing this stock 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 Nivalis Therapeutics if it manages to break out above some key near-term overhead resistance levels at $9.11 to $9.40 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 of 116,882 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 $10.50 to its 50-day moving average of $11.96, or even $12.72 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 near-term support at $8 a share or around those recent double bottom support levels. One can also buy shares of Nivalis Therapeutics 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.

WaferGen Bio-systems


Another under-$10 healthcare player that's starting to move within range of triggering a big breakout trade is WaferGen Bio-systems  (WGBS) , which engages in the development of systems for gene expression quantification, genotyping and stem cell research. This stock has been annihilated by the sellers over the last six months, with shares down huge by 76.5%.

If you look at the chart for WaferGen Bio-systems, you'll notice that this stock spiked sharply higher on Wednesday right above some near-term support at 85 cents per share with strong upside volume flows. Volume for the day registered over 1.66 million shares, which is well above its three-month average action of 1.26 million shares. This high-volume spike to the upside is now quickly pushing shares of WaferGen Bio-systems within range of triggering a big breakout trade above a key downtrend line.

Market players should now look for long-biased trades in WaferGen Bio-systems if it manages to break out above that downtrend line that will trigger over some near-term overhead resistance levels at Wednesday's intraday high of $1.04 a share and then above more resistance at $1.12 to $1.15 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 1.26 million shares. If that breakout fires off soon, then this stock will set up to re-fill some of its previous gap-down-day zone from October that started near $1.60 a share.

Traders can look to buy WaferGen Bio-systems off weakness to anticipate that breakout and simply use a stop that sits right below some near-term support at 90 cents per share or near more support at 85 cents per share. One can also buy this stock 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.

Gran Tierra Energy


One final under-$10 energy player that's starting to trend within range of triggering a big breakout trade is Gran Tierra Energy  (GTE - Get Report) , which engages in the acquisition, exploration, development and production of oil and gas properties in Colombia, Peru and Brazil. This stock has been smashed lower by the sellers over the last six months, with shares down sharply by 32.8%.

If you take a glance at the chart for Gran Tierra Energy, you'll notice that this stock spiked sharply higher on Wednesday right above its 50-day moving average of $2.41 a share and back above its 20-day moving average of $2.52 a share with above-average volume. Volume for the day registered over 900,000 shares, which is just above its three-month average action of 851,620 shares. That high-volume spike to the upside is now quickly pushing shares of Gran Tierra Energy within range of triggering a big breakout trade above some key near-term overhead resistance levels.

Traders should now look for long-biased trades in Gran Tierra Energy if it manages to break out above some near-term overhead resistance levels at $2.58 to $2.61 a share and then above more resistance at its 200-day moving average of $2.70 to $2.80 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 851,620 shares. If that breakout develops soon, then this stock will set up to re-test or possibly take out its next major overhead resistance levels at $2.97 to $3.31, or even $3.50 to $4 a share.

Traders can look to buy shares of Gran Tierra Energy off weakness to anticipate that breakout and simply use a stop that sits right around some key near-term support levels at $2.37 to $2.19 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.

 

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