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 large movers to the upside in the under-$10 complex from Wednesday, including Electromed (ELMD) , which exploded higher by 86.2%; Limelight Networks (LLNW) , which ripped up by 38.8%; TearLab (TEAR) ,which spiked up by 34.1%; and Ritter Pharmaceuticals (RTTR) , which surged by 29.3%. 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.

TravelCenters of America

One under-$10 services player that's starting to move within range of triggering a near-term breakout trade is TravelCenters of America  (TA) , which operates and franchises travel centers primarily along the U.S. interstate highway system. This stock has been smoked by the sellers over the last three months, with shares off sharply by 45.7%.

If you take a glance at the chart for TravelCenters of America, you'll notice that this stock recently attempted to carve out a double bottom chart pattern, after shares found some buying interest at $6.41 to $6.49 a share. Shares of TravelCenters of America ripped notably higher on Wednesday and displayed relative strength versus the overall market weakness right off those recent double bottom support levels. This rip to the upside is now quickly pushing 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 TravelCenters of America if it manages to break out above some near-term overhead resistance levels at $7.22 to $7.37 a share and then above more resistance around $7.50 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 311,415 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 $8 to its 50-day moving average of $8.45, or even $9 to $9.25 a share.

Traders can look to buy this stock off weakness to anticipate that breakout and simply use a stop that sits right below those recent double bottom support levels. One can also buy shares of TravelCenters of America 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.

Zafgen


Another under-$10 biopharmaceutical player that's starting to spike within range of triggering a big breakout trade is Zafgen  (ZFGN) , which focuses on the development of therapeutics for patients suffering from obesity and obesity-related disorders. This stock has been slammed by the bears over the last six months, with shares off large by 83.5%.

If you take a look at the chart for Zafgen, you'll notice that this stock has been attempting to carve out a major bottoming chart pattern over the last two months and change, with shares finding some buying interest whenever it trades near or a bit below $5.50 a share. This stock ripped sharply higher on Wednesday and displayed relative strength versus the overall market weakness right off those previous support levels with lighter-than-average volume. This move is now quickly pushing shares of Zafgen 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 Zafgen if it manages to break out above Wednesday's intraday high of $6.47 a share and then above $6.80 to its 50-day moving average of $7 a share and over $7.11 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 1.80 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 $8 to $8.33, or even $9 to $9.50 a share.

Traders can look to buy this stock off weakness to anticipate that breakout and simply use a stop that sits right below Wednesday's intraday low of $5.86 a share or just below $5.50 a share. One can also buy shares of Zafgen 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.

Republic Airways


One under-$10 regional airlines player that's starting to spike within range of triggering a big breakout trade is Republic Airways  (RJET) , which  through its subsidiaries, provides scheduled passenger services. This stock has been annihilated by the bears over the last three months, with shares plunging lower by 51.6%.

If you take a glance at the chart for Republic Airways, you'll notice that this stock spike notably higher on Wednesday versus the overall market weakness with above-average volume. Volume for that trading session registered over 1.74 million shares, which is well above its three-month average action of 1.19 million shares. This high-volume rip to the upside is now quickly pushing shares of Republic Airways 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 Republic Airways if it manages to break out above Wednesday's intraday high of $2.22 a share and then above more key near-term resistance at $2.50 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 1.19 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 $3 to its 50-day moving average of $3.13, or even $3.50 a share.

Traders can look to buy this stock off weakness to anticipate that breakout and simply use a stop that sits right below its 20-day moving average of $1.99 a share. One can also buy shares of Republic Airways 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.

Adaptimmune Therapeutics


Another under-$10 clinical-stage biopharmaceutical player that's starting to trend within range of triggering a big breakout trade is Adaptimmune Therapeutics  (ADAP) , which focuses on the provision of cancer immunotherapy products based on its T-cell receptor platform. This stock has been under heavy selling pressure over the last six months, with shares falling large by 48.6%.

If you look at the chart for Adaptimmune Therapeutics, you'll notice that this stock recently broke below some near-term support at $6.90 to $6.75 a share, and then went on to print a new 52-week low of $6.19 a share. Shares of Adaptimmune Therapeutics spiked sharply higher on Wednesday right above that new 52-week low of $6.19 a share with lighter-than-average volume. This spike 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 Adaptimmune Therapeutics if it manages to break out above some near-term overhead resistance levels at $7.36 to its 20-day moving average of $7.60 a share and then above some more key resistance at $8.10 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 350,313 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 $9 to its 50-day moving average of $9.19, or even $9.28 to over $10 a share.

Traders can look to buy Adaptimmune Therapeutics off weakness to anticipate that breakout and simply use a stop that sits right below Wednesday's intraday low of $6.60 a share or around its new 52-week low of $6.19 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.

Kratos Defense & Security Solutions


One final under-$10 defense player that's starting to spike within range of triggering a near-term breakout trade is Kratos Defense & Security Solutions  (KTOS) , which provides mission critical products, solutions and services primarily for the U.S. Government. This stock has been smashed lower by the sellers over the last six months, with shares down sharply by 36.6%.

If you take a glance at the chart for Kratos Defense & Security Solutions, you'll notice that this stock has been uptrending over the last month or so, with shares moving higher off its new 52-week low of $2.80 a share to its recent high of $3.32 a share. During that uptrend, this stock has been making mostly higher lows and higher highs, which is bullish technical price action. Shares of Kratos Defense & Security Solutions spiked modestly higher on Wednesday right off its 20-day moving average of $3.13 a share with lighter-than-average volume. This spike is now starting to push this stock within range of triggering a near-term breakout trade above some key overhead resistance levels.

Traders should now look for long-biased trades in Kratos Defense & Security Solutions if it manages to break out above some near-term overhead resistance levels at $3.28 to $3.32 a share and then above more resistance at $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 of 574,897 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 its 50-day moving average of $3.65 to $3.80, or even $4 to $4.20 a share.

Traders can look to buy shares of Kratos Defense & Security Solutions off weakness to anticipate that move and simply use a stop that sits right below some near-term support levels at $3 to $2.92 a share or even near its new 52-week low of $2.80 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.

 

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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