5 Breakout Stocks Under $10 Set to Soar

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 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 Threshold Pharmaceuticals (THLD) , which ripped up by 55.1%; Bonanza Creek Energy (BCEI) , which soared 45.1%; Auris Medical Holding (EARS) , which jumped 39.3%; and Marrone Bio Innovations (MBII) , which trended up by 34.2%. 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. 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.

Onconova Therapeutics

One under-$10 clinical-stage biopharmaceutical player that's starting to spike within range of triggering a big breakout trade is Onconova Therapeutics  (ONTX) , which focuses on discovering and developing small molecule drug candidates to treat cancer. This stock has been under selling pressure over the last three months, with shares off sharply by 27.1%.

If you take a glance at the chart for Onconova Therapeutics, you'll notice that this stock spiked sharply higher on Wednesday back above its 20-day moving average of $3.65 a share with heavy upside volume flows. Volume for that trading session registered over 415,000 shares, which is well above its three-month average action of 77,813 shares. This high-volume rip to the upside is now quickly pushing shares of Onconova Therapeutics 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 Onconova Therapeutics if it manages to break out above Wednesday's intraday high of $3.84 a share and then above more key resistance levels at $3.92 to $4 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 77,813 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 $4.50 to its 50-day moving average of $4.74, or even $5 to $5.50 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 $3.32 a share or near its new 52-week low of $3.13 a share. One can also buy shares of Onconova Therapeutics 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.

Ignyta

Another under-$10 biotechnology player that's starting to trend within range of triggering a near-term breakout trade is Ignyta  (RXDX) , which engages in discovering, in-licensing or acquiring, developing and commercializing molecularly targeted therapies for eradicating residual diseases. This stock has been smacked lower by the bears over the last six months, with shares falling sharply by 40.5%.

If you take a look at the chart for Ignyta, you'll notice that this stock spiked sharply higher on Wednesday right off both its 50-day moving average of $5.56 a share and its 20-day moving average of $5.61 a share with above-average volume. This stock recently formed a double bottom chart pattern, after shares found some buying interest at $5.25 to $5.33 a share. Following that potential bottom, shares of Ignyta have now started to spike higher and it's quickly moving within range of triggering a near-term breakout trade.

Market players should now look for long-biased trades in Ignyta if it manages to break out above some near-term overhead resistance levels at $6 to $6.21 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 255,947 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 $7 to $7.65 a share, or even its 200-day moving average of $8.31 a share.

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

Adamis Pharmaceuticals

One under-$10 specialty biopharmaceutical player that's starting to trend within range of triggering a big breakout trade is Adamis Pharmaceuticals  (ADMP) , which engages in developing and commercializing products in the therapeutic areas of allergy and respiratory disease. This stock has been destroyed by the sellers over the last six months, with shares dropping sharply by 46.8%.

If you take a glance at the chart for Adamis Pharmaceuticals, you'll notice that this stock has been downtrending badly over the last two months and change, with shares falling sharply off its high of around $4.50 a share to its new 52-week low hit on Wednesday at $2.50 a share. During that downtrend, shares of Adamis Pharmaceuticals have been making mostly lower highs and lower lows, which is bearish technical price action. That said, this stock has now started to bounce off that $2.50 low and it's quickly moving within range of triggering a big breakout trade.

Traders should now look for long-biased trades in Adamis Pharmaceuticals if it manages to break out above some near-term overhead resistance levels at $2.75 a share to its 20-day moving average of $2.77 a share with volume that hits near or above its three-month average action of 350,897 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 its 50-day moving average of $2.94 to $3.09, or even $3.15 to $3.34 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 new 52-week low of $2.50 a share. One can also buy shares of Adamis Pharmaceuticals 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.

Keryx Biopharmaceuticals

Another under-$10 biopharmaceutical player that's starting to trend within range of triggering a near-term breakout trade is Keryx Biopharmaceuticals  (KERX) , which focuses on providing therapies for patients with renal disease in the U.S. This stock has been under selling pressure over the last three months, with shares moving lower by 17.7%.

If you look at the chart for Keryx Biopharmaceuticals, you'll notice that this stock recently gapped-down sharply lower from $7.50 a share to under $4.75 a share with massive downside volume flows. Following that move, this stock went on to print a near-term low of $4.05 a share, before the stock has started to bounce higher to around $4.50 a share. This bounce is now quickly pushing shares of Keryx Biopharmaceuticals 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 Keryx Biopharmaceuticals if it manages to break out above some near-term overhead resistance levels at $4.53 to $4.60 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 1.65 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 its 200-day moving average of $5.08 a share to its gap-down-day high near $5.50 a share. Any high-volume move above $5.50 will then give this stock a chance to re-fill some of its previous gap-down-day zone that started near $7.50 a share.

Traders can look to buy Keryx Biopharmaceuticals off weakness to anticipate that breakout and simply use a stop that sits right below its recent low of $4.05 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.

Cobalt International Energy

One final under-$10 energy player that's starting to spike within range of triggering a near-term breakout trade is Cobalt International Energy  (CIE) , which operates as an oil and gas exploration and production company primarily in the deepwater U.S. Gulf of Mexico. This stock has been smashed lower by the sellers over the last six months, with shares off sharply by 58.6%.

If you take a glance at the chart for Cobalt International , you'll notice that this stock recently formed a double bottom chart pattern, after shares found some buying interest over the last few weeks at 77 to 82 cents per share. Following that potential bottom, this stock has now started to uptrend strong, with shares moving higher from 82 cents to its intraday high on Wednesday of 1.06 a share. That strong uptrend has now pushed shares of Cobalt International within range of triggering a near-term breakout trade above some key overhead resistance levels.

Traders should now look for long-biased trades in Cobalt International Energy if it manages to break out above some near-term overhead resistance levels at $1.06 to $1.10 a share and then above its 20-day moving average of $1.17 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 6.23 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 $1.30 to its 50-day moving average of $1.49, or even $1.60 to $1.80 a share.

Traders can look to buy shares of Cobalt International Energy 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 around those double bottom support levels. One can also buy this stock 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.

Disclosure: This article is commentary by an independent contributor. At the time of publication, the author was long ADMP.

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