These 5 Stocks Under $10 Could Make You a Lot of Money

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 solid 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 Nymox Pharmaceuticals (NYMX) , which exploded higher by 83%; Xtera Communications (XCOM) , which ripped higher by 52.7%; xG Technology (XGTI) , which jumped 36.5%; and TOP Ships (TOPS) , which soared by 22.6%. 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.

BioLife Solutions

One under-$10 health care player that's starting to spike within range of triggering a big breakout trade is BioLife Solutions  (BLFS) , which develops, manufactures, and markets patented hypothermic storage and cryopreservation solutions for cells and tissues in the U.S. This stock has been in play with the bulls over the last three months, with shares moving up sharply by 28%.

If you take a glance at the chart for BioLife Solutions, you'll notice that this stock recently formed a double bottom chart pattern, after shares found some buying interest at $1.77 to $1.81 a share. Following that potential bottom, this stock has now started to spike higher and challenge all of its key moving averages. That spike is now quickly pushing shares of BioLife Solutions within range of triggering a near-term breakout trade.

Market players should now look for long-biased trades in shares of BioLife Solutions if it manages to break out above Wednesday's intraday high of $1.97 a share to $2 a share and then above more near-term resistance at around $2.10 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 395,894 shares. If that breakout takes hold soon, then this stock will set up to re-test or possibly take out its next major overhead resistance levels at $2.26 to $2.27 a share, or even $2.40 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 BioLife Solutions 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.

Hutchinson Technology

Another under-$10 stock that's starting to trend within range of triggering a near-term breakout trade is Hutchinson Technology  (HTCH) , which researches, designs, develops, manufactures and supplies suspension assemblies for hard disk drives in Thailand, Hong Kong, the Philippines, Malaysia and the U.S. This stock has been smashed lower by the bears over the last six months, with shares dropping sharply by 55%.

If you take a look at the chart for Hutchinson Technology, you'll notice that this stock has been uptrending strong over the last month, with shares moving higher off its low of $1.32 a share to its intraday high on Wednesday of $1.74 a share. During that uptrend, this stock has 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 near-term breakout trade.

Market players should now look for long-biased trades in Hutchinson Technology if it manages to break out above some near-term overhead resistance levels at $1.73 to $1.74 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 268,566 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 $2 to $2.20 a share. Any high-volume move above $2.20 will then give this stock a chance to re-fill some of its previous gap-down-day zone from July that started at $3.20 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 key near-term support levels at $1.53 to $1.46 a share. One can also buy shares of Hutchinson Technology 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.

Celadon Group

An under-$10 trucking player that's starting to spike within range of triggering a near-term breakout trade is Celadon Group  (CGI) , which provides transportation services between the U.S., Canada and Mexico. This stock has been under notable selling pressure over the last six months, with shares off by 19.1%.

If you take a glance at the chart for Celadon Group, you'll notice that this stock has been downtrending badly over the last three months, with shares falling sharply off its high of $11.99 a share to its recent low of $6.64 a share. During that downtrend, shares of Celadon Group 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 $6.64 low and it's quickly moving within range of triggering a near-term breakout trade.

Traders should now look for long-biased trades in Celadon Group if it manages to break out above its 20-day moving average of $7.49 a share and then above more near-term overhead resistance at $7.65 a share with volume that hits near or above its three-month average action of 385,244 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 $8.19 to its 50-day moving average of $8.25, or even $8.36 to $9 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 recent low of $6.64 a share. One can also buy shares of Celadon Group 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.

Glu Mobile

Another under-$10 technology player that's starting to trend within range of triggering a near-term breakout trade is Glu Mobile  (GLUU) , which develops, publishes and markets a portfolio of games for the smartphones and tablet devices users. This stock has been under heavy selling pressure over the last six months, with shares falling sharply by 37.6%.

If you look at the chart for Glu Mobile, you'll notice that this stock has been uptrending a bit over the last month, with shares moving higher off its low of $2.05 a share to its recent high of $2.34 a share. During that uptrend, shares of Glu Mobile have been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of Glu Mobile within range of triggering a near-term breakout trade.

Market players should now look for long-biased trades in Glu Mobile if it manages to break out above some near-term overhead resistance levels at $2.33 to $2.45 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 1.88 million shares. If that breakout materialize 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 $2.68 a share to $2.95, or even $3 to $3.20 a share.

Traders can look to buy Glu Mobile off weakness to anticipate that breakout and simply use a stop that sits right around some key near-term support levels at $2.13 to $2.05 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.

Netlist

One final under-$10 stock that's quickly trending within range of triggering a big breakout trade is Netlist  (NLST) , which designs, manufactures and sells a range of logic-based memory subsystems for the datacenter, storage and high-performance computing markets worldwide. This stock has been red hot with the bulls over the last six months, with shares soaring higher by 43.8%.

If you take a glance at the chart for Netlist , you'll notice that this stock has been uptrending strong over the last three months, with shares ripping higher off its low of 94 cents per share to its recent high of $1.80 a share. During that uptrend, shares of Netlist have been consistently making higher lows and higher highs, which is bullish technical price action. That strong uptrend has now pushed shares of Netlist within range of triggering a big breakout trade.

Traders should now look for long-biased trades in Netlist if it manages to break out above some near-term overhead resistance at its 52-week high of $1.80 a share with high volume. Look for a sustained move or close above that level with volume that registers near or above its three-month average action of 231,269 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 $2.08 to $2.25, or even $2.41 to $3 a share.

Traders can look to buy shares of Netlist off weakness to anticipate that breakout and simply use a stop that sits right around its 20-day moving average of $1.59 a share or close to some more near-term support levels at $1.53 to $1.40 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.

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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