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 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 Thursday, including DryShips  (DRYS)  which soared by 133.3%; StemCells  (STEM) , which ripped up by 46.9%; MannKind  (MNKD) , which soared by 33%; and Eleven Biotherapeutics  (EBIO) , which jumped higher by 26%. 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 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.

Cumulus Media

One under-$10 broadcasting player that's starting to move within range of triggering a big breakout trade is Cumulus Media  (CMLS) which owns and operates radio stations in the U.S. This stock has been smoked by the sellers over the last six months, with shares falling sharply by 63%.

If you take a glance at the chart for Cumulus Media, 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 $3.28 a share to its recent low of 95 cents per share. During that downtrend, shares of Cumulus Media have been consistently making lower highs and lower lows, which is bearish technical price action. That said, this stock recently formed a double bottom chart pattern at 95 to 96 cents per share. If that bottom can hold, this stock now has a chance to trigger a breakout trade above some key overhead resistance levels.

Market players should now look for long-biased trades in shares of Cumulus Media if it manages to break out above some near-term overhead resistance levels at $1.10 to $1.15 a share and then above more resistance at $1.20 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 202,655 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 $1.35 to its 20-day moving average of $1.46 a share, or even $1.60 to $1.90 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 Cumulus Media 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.

Tandem Diabetes Care

Another under-$10 medical device player that's starting to trend within range of triggering a big breakout trade is Tandem Diabetes Care  (TNDM) , which designs, develops, and commercializes various products for people with insulin-dependent diabetes in the U.S. This stock has been destroyed by the sellers over the last six months, with shares collapsing by 74.6%.

If you take a look at the chart for Tandem Diabetes Care, you'll notice that this stock recently gapped-down sharply lower from around $6 a share to just under $2 a share with monster downside volume flows. Following that move, shares of Tandem Diabetes Care went on to print a new 52-week low at $1.60 a share. That said, this stock has now started to rebound a bit off that $1.60 low with decent upside volume flows. That rebound is now quickly pushing shares of Tandem Diabetes Care within range of triggering a big breakout trade above some key overhead resistance levels.

Market players should now look for long-biased trades in Tandem Diabetes Care if it manages to break out above some near-term overhead resistance levels at $2 a share to around $2.15 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 237,340 shares. If that breakout triggers soon, then this stock will set up to re-fill some of its previous gap-down-day zone from earlier this month that started near $6 a share. Some possible upside targets are $3 to $3.50 a share if this stock gets into that gap with strong upside volume flows.

Traders can look to buy this stock off weakness to anticipate that breakout and simply use a stop that sits right around its new 52-week low of $1.60 a share. One can also buy shares of Tandem Diabetes Care 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.

Ascena Retail Group

One under-$10 apparel stores player that's starting to trend within range of triggering a near-term breakout trade is Ascena Retail Group  (ASNA) , which operates as a specialty retailer of apparel, shoes, and accessories for women and tween girls in the U.S. This stock has been smacked lower by the bears over the last six months, with shares falling sharply by 22%.

If you take a glance at the chart for Ascena Retail Group, you'll notice that this stock recently formed a double bottom chart pattern, after shares found some buying interest at $4.68 to $4.80 a share over the last month. Following that potential bottom, this stock has now started to uptrend and move back above its 20-day moving average of $5.07 a share. That uptrend is now quickly pushing shares of Ascena Retail Group within range of triggering a big breakout trade above some key overhead resistance levels.

Traders should now look for long-biased trades in Ascena Retail Group if it manages to break out above some near-term overhead resistance levels at $6.05 to $6.10 a share and then above $6.25 a share with volume that registers near or above its three-month average action of 4.31 million shares. If that breakout develops soon, then this stock will set up to re-fill some of its previous gap-down-day zone from September that started near $8.25 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 near-term support levels at $5.50 to $5.20 a share, or near its 20-day moving average of $5.07 a share. One can also buy shares of Ascena Retail Group 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.

OvaScience

Another under-$10 healthcare player that's starting to trend within range of triggering a near-term breakout trade is OvaScience  (OVAS) , which discovers, develops, and commercializes new fertility treatment options for women worldwide. This stock has been in a negative trend over the last six months, with shares dropping sharply by 49.1%.

If you look at the chart for OvaScience, you'll notice that this stock has been downtrending badly over the last two months and change, with shares collapsing lower off its high of $8.98 a share to its new 52-week low of $3.39 a 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 OvaScience have now started to rebound a bit off that $3.39 low with decent volume, and it's quickly trending within range of triggering a near-term breakout trade.

Market players should now look for long-biased trades in OvaScience if it manages to break out above some near-term overhead resistance levels at $3.75 to $4 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 413,938 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 $4.60 to its 20-day moving average of $4.96 a share, or even $5.20 to $5.50 a share.

Traders can look to buy OvaScience off weakness to anticipate that breakout and simply use a stop that sits right below its new 52-week low of $3.39 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.

Cedar Realty Trust

One final under-$10 REIT player that's starting to move within range of triggering a near-term breakout trade is Cedar Realty Trust  (CDR) , which is an independent equity real estate investment trust. This stock has been under some selling pressure over the last three months, with shares off by 13.6%.

If you take a glance at the chart for Cedar Realty Trust, you'll notice that this stock has been downtrending over the last two months and change, with shares moving lower off its high of $7.92 a share to its new 52-week low of $5.92 a share. During that downtrend, shares of Cedar Realty Trust have been making mostly lower highs and lower lows, which is bearish technical price action. That said, this stock has now started to rebound off that $5.92 low, and it's quickly beginning to move within range of triggering a near-term breakout trade.

Traders should now look for long-biased trades in Cedar Realty Trust if it manages to break out above its 20-day moving average of $6.58 a share and then above some more near-term resistance at $6.76 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 365,217 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 its 50-day moving average of $6.94 a share or its 200-day moving average of $7.05 a share, or even $7.15 to $7.50 a share.

Traders can look to buy shares of Cedar Realty Trust off weakness to anticipate that breakout and simply use a stop that sits right below some near-term support at around $6.15 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.

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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