5 Stocks Under $10 to Trade for Breakouts

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 monster movers to the upside in the under-$10 complex from Wednesday, including Pacific Drilling (PACD) , which exploded up by 45.7%; Lillis Energy (LLEX) , which ripped 45%; Eagle Bulk Shipping (EGLE) , which soared by 31.8%; and Stone Energy (SGY) , which jumped up 27.6%. 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. These are also the exact type of stocks that I love to trade and alert to my subscribers in real-time. 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.

Atlas Resource Partners


One under-$10 energy player that's starting to spike within range of triggering a big breakout trade is Atlas Resource Partners  (ARP) , which operates as an independent developer and producer of natural gas, crude oil and natural gas liquids in the U.S. This stock has been destroyed by the sellers over the last six months, with shares off huge by 67.9%.

If you take a glance at the chart for Atlas Resource Partners, you'll notice that this stock ripped sharply higher on Wednesday right off its 20-day moving average of 73 cents per share and back above its 50-day moving average of 76 cents per share with strong upside volume flows. Volume for that trading session registered over 1.15 million shares, which is well above its three-month average action of 733,156 shares. This high-volume spike to the upside is now quickly pushing shares of Atlas Resource Partners 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 Atlas Resource Partners if it manages to break out above Wednesday's intraday high of 79 cents per share and then above more key resistance at 84 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 733,156 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 97 cents to $1.11, or even $1.25 to $1.31 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 70 cents per share. One can also buy shares of Atlas Resource Partners 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.

C&J Energy Services

Another under-$10 stock that's starting to spike within range of triggering a big breakout trade is C&J Energy Services  (CJES) , which provides completion and production services for oil and gas industry primarily in North America. This stock has been smashed lower by the sellers over the last six months, with shares off large by 67.8%.

If you take a look at the chart for C&J Energy Services, you'll see that this stock ripped sharply higher on Wednesday right above some near-term support at $1.33 a share and back above its 20-day moving average of $1.44 a share with strong upside volume flows. Volume for that trading session registered over 4.16 million shares, which is well above its three-month average action of 2.68 million shares. This high-volume jump to the upside is now quickly pushing shares of C&J Energy Services within range of triggering a big breakout trade.

Market players should now look for long-biased trades in C&J Energy Services if it manages to break out above Wednesday's intraday high of $1.63 a share and then once it takes out more key resistance at $1.70 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 2.68 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 $2.07 to $2.45 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 $1.33 a share or near more support at $1.21 a share. One can also buy shares of C&J Energy Services 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.


Vanguard Natural Resources

One under-$10 energy player that's starting to trend within range of triggering a big breakout trade is Vanguard Natural Resources  (VNR) , which acquires and develops oil and natural gas properties in the U.S. This stock has been under massive selling pressure over the last six months, with shares plunging lower by 75.8%.

If you take a glance at the chart for Vanguard Natural Resources, you'll notice that this stock spiked notably higher on Wednesday right above its 20-day moving average of $1.69 a share with strong upside volume flows. Volume for that trading session registered over 3.36 million shares, which is well above its three-month average action of 2.63 million shares. This high-volume spike to the upside is now quickly pushing shares of Vanguard Natural Resources within range of triggering a big breakout trade.

Traders should now look for long-biased trades in Vanguard Natural Resources if it manages to break out above some near-term overhead resistance at $1.90 a share with high volume. Look for a sustained move or close above that level with volume that hits near or above its three-month average action of 2.63 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 $2.17 to $2.25, or even $2.44 to $2.70 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 $1.69 a share or near more key support at $1.53 a share. One can also buy shares of Vanguard Natural Resources 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.

LendingClub


An under-$10 credit services player that's starting to move within range of triggering a near-term breakout trade is LendingClub  (LC) , which operates as an online marketplace that connects borrowers and investors in the U.S. This stock has been hit hard by the bears over the last six months, with shares off by 39.7%.

If you look at the chart for LendingClub, you'll notice that this stock ripped sharply higher on Wednesday right above some near-term support at $7.34 a share and back above its 20-day moving average of $7.82 a share with above-average volume. This high-volume rip to the upside is now quickly pushing shares of LendingClub 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 LendingClub if it manages to break out above its 50-day moving average of $8.34 a share and then once it takes out more key resistance levels at $8.41 to around $8.50 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 6.35 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 at $9 to $9.36, or even $9.80 to $10.50 a share.

Traders can look to buy LendingClub off weakness to anticipate that breakout and simply use a stop that sits right below its 20-day moving average of $7.82 a share or around more key support at $7.34 a 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.

 

Breitburn Energy Partners


One final under-$10 stock that's starting to rip within range of triggering a big breakout trade is Breitburn Energy Partners  (BBEP) , which acquires, exploits and develops oil, natural gas liquids and natural gas properties in the U.S. This stock has been annihilated by the sellers over the last six months, with shares falling big by 81.9%.

If you take a glance at the chart for Breitburn Energy Partners, you'll notice that this stock has been downtrending badly over the last two months, with shares falling sharply lower off its high of $1.25 a share to its new 52-week low of 30 cents per 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 Breitburn Energy Partners ripped sharply higher on Wednesday with strong upside volume flows. Volume for that trading session registered over 5.99 million shares, which is well above its three-month average action of 2.88 million shares. This high-volume spike to the upside is now quickly pushing this stock within range of triggering a big breakout trade.

Traders should now look for long-biased trades in Breitburn Energy Partners if it manages to break out above some near-term overhead resistance levels at Wednesday's intraday high of 39 cents per share and then above more key resistance at 41 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 2.88 million 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 20-day moving average of 46 cents per share to around 55 cents per share. Any high-volume move above 55 cents per share will then give this stock a chance to refill some of its previous gap-down-day zone from earlier this month that started near 70 cents per share.

Traders can look to buy shares of Breitburn Energy Partners off weakness to anticipate that breakout and simply use a stop that sits right below Wednesday's intraday low of 34 cents per share or around its new 52-week low of 30 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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