These 5 Stocks Under $10 Could Light Up Soon

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 Benitec Biopharma  (BNTC) , which is soaring by 113%; Naked Brand Group (NAKD) , which is exploding higher by 93%; Tenax Therapeutics (TENX) , which is ripping up 50%; and Pulmatrix (PULM) , which is surging by 50%. 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.

Zogenix

One under-$10 pharmaceutical player that's starting to move within range of triggering a near-term breakout trade is Zogenix (ZGNX) , which develops and commercializes therapies for the treatment of central nervous system disorders in the U.S. This stock has been trending lower over the last six months, with shares off by 12.7%.

If you take a look at the chart for Zogenix, you'll notice that this stock has been downtrending badly over the last month, with shares falling sharply off its high of $13.40 a share to its intraday low on Thursday of $7.70 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 Zogenix have now started to find some support right above its November low of $7.50 a share and it's starting to spike a bit higher off right above that previous support. This stock is now starting to trend within range of triggering a near-term breakout trade.

Market players should now look for long-biased trades in Zogenix if it manages to break out above some near-term overhead resistance levels at $8.25 to $8.75 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 volume of 247,056 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 its 20-day moving average of $9.80 a share to its 200-day moving average of $9.96 a share, or even $10.50 to $11 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 support levels at $7.50 to its 52-week low of $7.33 a share. One can also buy shares of Zogenix 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.

Lattice Semiconductor

Another under-$10 semiconductor player that's starting to trend within range of triggering a near-term breakout trade is Lattice Semiconductor (LSCC) , which develops and sells semiconductor devices in Asia, Europe, and the Americas. This stock has been in play with the bulls over the last six months, with shares moving higher by 20.5%.

If you take a glance at the chart for Lattice Semiconductor, you'll notice that this stock has been consolidating and trending sideways over the last two months, with shares moving between $6.72 a share on the downside and $7.42 a share on the upside. This stock has now started to spike higher right off both its 50-day moving average of $7.17 a share and its 20-day moving average of $7.19 a share. That modest spike is now starting to push shares of Lattice Semiconductor within range of triggering a near-term breakout trade above the upper-end of its recent sideways trending chart pattern.

Traders should now look for long-biased trades in Lattice Semiconductor if it manages to break out above some near-term overhead resistance levels at $7.32 to $7.42 a share with volume that registers near or above its three-month average action of 2.22 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 its 52-week high of $7.99 to $8.50, or even $9.20 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 $6.93 to $6.71 a share. One can also buy shares of Lattice Semiconductor 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.

PhaseRx

One under-$10 biopharmaceutical player that's starting to trend within range of triggering a big breakout trade is PhaseRx (PZRX) , which engages in developing a portfolio of mRNA products to correct life-threatening inherited liver diseases in children. This stock has been smacked hard by the sellers over the last six months, with shares dropping sharply by 52.3%.

If you look at the chart for PhaseRx, you'll notice that this stock has been finding strong buying support over the last two months, each time it has pulled back to around $1.35 to $1.30 a share. Shares of PhaseRx are now starting to spike higher on Thursday right into its 20-day moving average of $1.44 a share with strong upside volume flows. Volume so far for this trading session has hit over 540,000 shares, which is just below its three-month average action of 696,000 shares. That strong volume bump to the upside is now quickly pushing shares of PhaseRx 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 PhaseRx if it manages to break out above its 50-day moving average of $1.54 a share and then once it takes out more near-term overhead resistance levels at $1.60 to $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 696,427 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 $1.94 to $2, or even $2.24 to $3 a share.

Traders can look to buy PhaseRx off weakness to anticipate that breakout and simply use a stop that sits right around some key near-term support levels at $1.36 to $1.30 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.

Cliffs Natural Resources

Another under-$10 basic materials player that's trending within range of triggering a near-term breakout trade is Cliffs Natural Resources (CLF) , which a mining and natural resources company, produces and supplies iron ore. This stock has been red hot over the last three months, with shares soaring higher by 66.5%.

If you look at the chart for Cliffs Natural Resources, you'll notice that this stock recently formed a double bottom chart pattern, after shares found some buying interest at $8.45 to $8.37 a share over the last month. Following that potential bottom, this stock has now started to spike higher and flirt with both its 20-day moving average of $9.01 a share and its 50-day moving average of $9.16 a share. That spike to the upside is now quickly pushing shares of Cliffs Natural Resources 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 Cliffs Natural Resources if it manages to break out above some near-term overhead resistance levels at its 50-day moving average of $9.16 a share to $9.43 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 14.06 million 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 $10 to its 52-week high of $10.90 a share, or even $11.50 to $12 a share.

Traders can look to buy Cliffs Natural Resources 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.

BioScrip

One final under-$10 healthcare player that's quickly trending within range of triggering a major breakout trade is BioScrip (BIOS) , which provides home infusion services in the U.S. This stock has been hit hard by the sellers over the last six months, with shares dropping large by 38.2%.

If you take a glance at the chart for BioScrip, you'll notice that this stock recently formed a double bottom chart pattern, after shares found some buying interest $1.21 to $1.25 a share over the last month. Following that potential bottom, shares of BioScrip have now started to uptrend sharply and move back above both its 50-day moving average of $1.27 a share and its 20-day moving average of $1.45 a share. That rip to the upside is now quickly pushing shares of BioScrip within range of triggering a major breakout trade above some key overhead resistance levels.

Traders should now look for long-biased trades in BioScrip if it manages to break out above some near-term overhead resistance levels at $1.60 to $1.80 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 2.19 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 last November that started near $2.70 a share.

Traders can look to buy shares of BioScrip off weakness to anticipate that breakout and simply use a stop that sits right below either its 20-day moving average of $1.45 a share or its 50-day moving average of $1.27 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.

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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