There isn't a day that goes by on Wall Street when certain stocks trading for under $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 big movers to the upside in the under-$10 complex from Wednesday, including Cesca Therapeutics (KOOL) , which exploded higher by 121.7%; Seanergy Maritime (SHIP) , which ripped up by 88.8%; Amedica (AMDA) ,which soared by 42.3%; and Transenterix (TRXC) , which surged by 27.4%. 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.

Kindred Healthcare


One under-$10 stock that's starting to trend within range of triggering a big breakout trade is Kindred Healthcare  (KND) , which provides healthncare services in the U.S. This stock has been smacked lower by the sellers over the last six months, with shares off sharply by 51.4%.

If you take a glance at the chart for Kindred Healthcare, you'll notice that this stock has been downtrending badly over the last five months, with shares collapsing off its high of $20.53 to its new 52-week low of $8.45 a share. During that downtrend, this stock has been making mostly lower highs and lower lows, which is bearish technical price action. That said, shares of Kindred Healthcare displayed some relative strength on Wednesday versus the overall market weakness, after the stock closed up 1.88% with decent upside volume flows. This relative strength is now quickly pushing this stock 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 shares of Kindred Healthcare if it manages to break above its 20-day moving average of $10.38 a share and then above some key near-term overhead resistance levels at $10.50 to $10.75 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 1.35 million 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 its 50-day moving average of $11.66 to $12, or even $12.40 to $13 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 near-term support at $8.89 a share or right below its new 52-week low of $8.45 a share. One can also buy shares of Kindred Healthcare 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.

Huntsman


Another under-$10 chemicals player that's starting to trend within range of triggering a big breakout trade is Huntsman  (HUN) , which manufactures and sells differentiated organic and inorganic chemical products worldwide. This stock has been hit hard by the sellers over the last six months, with shares dropping sharply lower by 51.6%.

If you take a look at the chart for Huntsman, you'll notice that this stock has been downtrending badly over the last three months and change, with shares falling sharply off its high of $13.87 to its new 52-week low of $7.45 a share. During that downtrend, this stock has been making mostly lower highs and lower lows, which is bearish technical price action. That said, shares of Huntsman ripped share sharply higher on Wednesday right above some near-term support at $7.84 a share, and this stock displayed relative strength versus the overall market weakness with strong upside volume flows. Volume for that day registered over 6.73 million shares, which is well above its three-month average action of 4.52 million shares. This high-volume rip to the upside is now quickly pushing this stock 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 Huntsman if it manages to break out above some key near-term overhead resistance levels at $8.99 a share to its 20-day moving average of $9.36 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 4.52 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 to its 50-day moving average of $10.54, or even $11 to $11.50 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 near-term support at $7.84 a share or right below its new 52-week low of $7.45 a share. One can also buy shares of Huntsman 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.

Capstone Turbine

One under-$10 stock that's starting to spike within range of triggering a near-term breakout trade is Capstone Turbine  (CPST) , which develops, manufactures, markets and services microturbine technology solutions for use in stationary distributed power generation applications worldwide. This stock has been destroyed by the bears over the last six months, with shares plunging lower by 79%.

If you take a glance at the chart for Capstone Turbine, you'll notice that this stock spiked notably higher on Wednesday and displayed some relative strength versus the overall market weakness and closed right on its 20-day moving average of $1.28 a share. This spiked to the upside in a downtrending market is now quickly pushing shares of Capstone Turbine within range of triggering a near-term breakout trade above some key overhead resistance levels.

Traders should now look for long-biased trades in Capstone Turbine if it manages to break out above Wednesday's intraday high of $1.30 a share and then once it clears more near-term overhead resistance levels at $1.34 to $1.40 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 355,229 shares. If that breakout begins soon, then this stock will set up to re-test or possibly take out its next major overhead resistance levels at its 50-day moving average of $1.44 to $1.50, or even $1.63 to $1.75 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 near-term support at $1.22 a share. One can also buy shares of Capstone Turbine off strength once it starts to push back above those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

Neos Therapeutics

Another under-$10 stock that's starting to trend within range of triggering a big breakout trade is Neos Therapeutics  (NEOS) , which develops, manufactures and commercializes products for the treatment of attention deficit hyperactivity disorder using its drug delivery technologies. This stock has been smacked lower by the sellers over the last six months, with shares dropping sharply lower by 52.7%.

If you look at the chart for Neos Therapeutics, you'll notice that this stock has been downtrending badly over the last six months, with shares collapsing off its of over $26 a share to its new 52-week low of $8.91 a share. During that massive downtrend, this stock has been making mostly lower highs and lower lows, which is bearish technical price action. That said, shares of Neos Therapeutics displayed some modest relative strength on Wednesday versus the overall market weakness, after the stock traded up 1% with slightly above-average volume. This relative strength to the upside is now quickly pushing this stock within range of triggering a big breakout trade above some near-term overhead resistance levels.

Market players should now look for long-biased trades in Neos Therapeutics if it manages to break out above some near-term overhead resistance levels at $10 to $10.50 a share and then above more key resistance levels at $11 to $11.06 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 102,905 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 its 20-day moving average of $11.38 to $11.50, or even $12 to its 50-day moving average of $13.16 a share.

Traders can look to buy Neos Therapeutics off weakness to anticipate that breakout and simply use a stop that sits right below its new 52-week low of $8.91 a 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.

Midstates Petroleum


One final under-$10 stock that's starting to trend within range of triggering a major breakout trade is Midstates Petroleum  (MPO) , which  engages in the exploration, development and production of oil, natural gas liquids and natural gas in the U.S. This stock has been annihilated by the sellers over the last six months, with shares plunging lower by 86.3%.

If you take a glance at the chart for Midstates Petroleum, you'll notice that this stock has been downtrending badly over the last five months, with shares collapsing off its high of $7.70 to its new 52-week low of 64 cents per share. During that downtrend, this stock has been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of Midstates Petroleum spiked sharply higher on Wednesday and displayed some relative strength versus the overall market weakness with strong upside volume flows. This high-volume trend to the upside 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 Midstates Petroleum if it manages to break out above some key near-term overhead resistance levels at 80 to 91 cents per share and then above more resistance around $1 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 147,608 shares. If that breakout fires off soon, then this stock will set up to re-test or possibly take out its next major overhead resistance levels at its 20-day moving average of $1.25 to around $1.50, or even $2 a share.

Traders can look to buy shares of Midstates Petroleum off weakness to anticipate that move and simply use a stop that sits right around its new 52-week low of 64 cents per 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.

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