5 Stocks Under $10 Poised for Big 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 big movers to the upside in the under-$10 complex from Wednesday, including Superconductor Technologies (SCON) , which ripped up by 49%; Denbury Resources (DNR) , which soared by 33.5%; Lucas Energy (LEI) , which spiked by 27.5%; and Stone Energy (SGY) , which jumped by 27.4%. 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.

Novadaq Technologies

One under-$10 healthcare player that's starting to spike within of triggering a near-term breakout trade is Novadaq Technologies (NVDQ) , which develops, manufactures and markets fluorescence imaging products for use by surgeons in the operating room and other clinical settings in the U.S. and internationally. This stock has been under selling pressure over the last three months, with shares off sharply by 35.1%.

If you take a glance at the chart for Novadaq Technologies, you'll notice this stock has been downtrending badly over the last three months, with shares falling sharply off its high of $12.74 a share to its new 52-week low Wednesday at $7.20 a 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 Novadaq Technologies managed to rip sharply higher on Wednesday after printing that $7.20 low with strong upside volume flows. Volume for that trading session registered over 1.10 million shares, which is well above its three-month average action of 275,127 shares. This high-volume spike 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 Novadaq Technologies if it manages to break out above some near-term overhead resistance levels at $8 to $8.50 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 275,127 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 $9.25 to $9.75, or even its 50-day moving average of $10.17 to its 200-day moving average of $10.42 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 $7.20 a share. One can also buy shares of Novadaq Technologies 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.

Fluidigm

Another under-$10 healthcare player that's quickly moving within range of triggering a big breakout trade is Fluidigm  (FLDM) , which creates, manufactures, and markets technologies and life science tools focused on the exploration and analysis of single cells, as well as the industrial application of genomics. This stock has been beat down by the sellers over the last six months, with shares falling sharply by 34.6%.

If you take a look at the chart for Fluidigm, you'll notice this stock ripped sharply higher on Wednesday right off its 50-day moving average of $6.18 a share with strong upside volume flows. Volume for that trading session registered around 500,000 shares, which is well above its three-month average action of 283,141 share. This high-volume rip jump to the upside is now quickly pushing shares of Fluidigm within range of triggering a big breakout trade above some key overhead resistance.

Market players should now look for long-biased trades in Fluidigm if it manages to break out above some near-term overhead resistance at $6.51 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 283,141 shares. If that breakout fires off soon, then this stock will set up to re-fill some of its previous gap-down-day zone from October that started near $8 a share. If that gap gets filled with strong volume, then shares of Fluidigm could even tag $8 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 some near-term support at $6 a share. One can also buy shares of Fluidigm 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.

BioPharmX

One under-$10 specialty pharmaceutical player that's starting to spike within range of triggering a major breakout trade is BioPharmX (BPMX) , which focuses on the development of novel drug delivery products for women's health and dermatology markets. This stock has been smacked lower by the sellers over the last six months, with shares down big by 50.7%.

If you take a glance at the chart for BioPharmX, you'll notice this stock ripped sharply higher on Wednesday right off its 20-day moving average of 27 cents per share with strong upside volume flows. Volume for that trading session registered over 1.35 million shares, which is well above its three-month average action of 272,278 shares. This high-volume spike to the upside is now quickly pushing shares of BioPharmX within range of triggering a major breakout trade above some key overhead resistance levels.

Traders should now look for long-biased trades in BioPharmX if it manages to break out above its 50-day moving average of 36 cents per share and then above more key resistance levels at 37 to 40 cents per share with volume that hits near or above its three-month average action of 272,278 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 50 to 60 cents, or even its 200-day moving average of 75 cents to 85 cents per share.

Traders can look to buy this stock off weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support levels at 27 to 25 cents per share. One can also buy shares of BioPharmX 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.

Eagle Bulk Shipping

Another under-$10 shipping player that's starting to move within range of triggering a big breakout trade is Eagle Bulk Shipping (EGLE) , which engages in the ocean transportation of a broad range of dry bulk cargoes worldwide through the ownership, charter, and operation of dry bulk vessels. This stock has been in a negative trend over the last six months, with dropping sharply by 43.1%.

If you look at the chart for Eagle Bulk Shipping, you'll notice this stock recently formed a double bottom chart pattern, after shares found some buying interest at $5.79 to $5.86 a share over the last few weeks. This potential bottom is coming after shares of Eagle Bulk Shipping saw an extremely volatile move in November, that pushed the stock from $4.10 to $11.16 a share, and then back to those double bottom support levels. If that bottom can hold as strong support, this stock is now starting to trend within range of triggering a big breakout trade above some key overhead resistance levels.

Market players should now look for long-biased trades in Eagle Bulk Shipping if it manages to break out above some near-term overhead resistance levels at $6.50 to $6.81 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 701,162 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 $7.50 to $8, or even $9 to $10 a share.

Traders can look to buy Eagle Bulk Shipping 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 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.

Tokai Pharmaceuticals

One final under-$10 biopharmaceutical player that's starting to move within range of triggering a big breakout trade is Tokai Pharmaceuticals (TKAI) , which focuses on developing and commercializing therapies for prostate cancer and other hormonally-driven diseases. This stock has been destroyed by the sellers over the last six months, with shares off large by 85.7%.

If you take a glance at the chart for Tokai Pharmaceuticals, you'll notice this stock has been trending sideways and consolidating over the last month or so, with shares moving between 88 cents on the downside and $1.23 on the upside. Shares of Tokai Pharmaceuticals have now started to flirt with its 20-day moving average of $1.03 a share after a number of strong upside volume sessions. That action is starting to push this stock within range of triggering a big breakout trade above the upper-end of its recent sideways trending chart pattern.

Traders should now look for long-biased trades in Tokai Pharmaceuticals if it manages to break out above some near-term overhead resistance levels at $1.08 to $1.19 a share and then above more resistance at $1.23 to its 50-day moving average of $1.29 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 1.30 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 $1.45 to $1.50, or even $1.86 to around $2 a share.

Traders can look to buy shares of Tokai Pharmaceuticals off weakness to anticipate that breakout and simply use a stop that sits right around some key near-term support levels at $1 a share to 95 cents, or even 88 cents per share. One can also buy this stock off strength once it starts to move back 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.

More from Stocks

Dow Ends Off 125 Points as Caterpillar, 3M Earnings Disappoint

Dow Ends Off 125 Points as Caterpillar, 3M Earnings Disappoint

It's Clear Nvidia Is Leading the A.I. Revolution

It's Clear Nvidia Is Leading the A.I. Revolution

Multiple Tailwinds Take Shape That Could Drive BP Gains

Multiple Tailwinds Take Shape That Could Drive BP Gains

Overwhelmed? Jim Cramer Breaks Down What You Must Watch This Week

Overwhelmed? Jim Cramer Breaks Down What You Must Watch This Week

Why Citron Is Wrong on Tesla

Why Citron Is Wrong on Tesla