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Just take a look at some of the big movers in the under-$10 complex from Friday, including Net Element International (NETE) , which is ripping higher by 52%; China Green Agriculture (CGA) , which is soaring higher by 34%; Lakeland Industries (LAKE) , which is soaring higher by 27%; and Lantronix (LTRX) , which is surging by 20%. 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. 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 names, I do it almost entirely based off of the charts and technical analysis. I also like to find under-$10 names 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.
MEI Pharma
One under-$10 oncology player that's starting to trend within range of triggering a big breakout trade is MEI Pharma (MEIP) , which focuses on the clinical development of novel therapies for the treatment of cancer. This stock has been hit hard by the sellers over the last six months, with shares off sharply by 29%.
If you take a glance at the chart for MEI Pharma, you'll notice that this stock been uptrending over the last two months and change, with shares moving higher from its low of $5.51 to its intraday high of $7.56 a share. During that move, shares of MEIP have been making mostly higher lows and higher highs, which is bullish technical price action. Shares of MEIP are now starting to spike higher right above its 50-day moving average of $6.76 a share. That move is starting to push shares of MEIP within range of triggering a big breakout trade above some key overhead resistance levels.
Traders should now look for long-biased trades in MEIP if it manages to break out above some key overhead resistance levels at $7.46 a share to its 200-day moving average of $7.80 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 144,352 shares. If that breakout materializes soon, then MEIP will set up to re-test or possibly take out its next major overhead resistance levels $8.55 to $9.40 a share, or even $10 to $10.50 a share.
Traders can look to buy MEIP off weakness to anticipate that breakout and simply use a stop that sits right below its 50-day moving average of $6.76 a share. One can also buy MEIP 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.
Parkervision
Another under-$10 technology player that's starting to move within range of triggering a big breakout trade is Parkervision (PRKR) , which designs, develops, and markets proprietary radio frequency (RF) technologies and products for use in semiconductor circuits for wireless communication products in the U.S. This stock has been destroyed by the sellers so far in 2014, with shares off sharply by 69%.
If you take a look at the chart for Parkervision, you'll see that this stock is starting to spike sharply higher right off its 50-day moving average of $1.27 a share. That spike is quickly pushing shares of PRKR within range of triggering a major breakout trade above some key overhead resistance levels.
Market players should now look for long-biased trades in PRKR if it manages to break out above some key overhead resistance levels at $1.35 to $1.40 a share and then above $1.43 to around $1.50 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 2.52 million shares. If that breakout develops soon, then PRKR will set up to re-test or possibly take out its next major overhead resistance levels at $1.74 to its gap-down-day high from June at $2.35 a share.
Traders can look to buy PRKR off weakness to anticipate that breakout and simply use a stop that sits right below its 50-day moving average of $1.27 a share or around some more near-term support at $1.18 a share. One can also buy PRKR 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.
Sky-mobi
One under-$10 technology player that's beginning to trend within range of triggering a big breakout trade is Sky-mobi (MOBI) which is engaged in the operation of a mobile application platform embedded on mobile phones to provide mobile application store and services in the People's Republic of China. This stock has been on fire so far in 2014, with shares up sharply by 143%.
If you take a glance at the chart for Sky-mobi, you'll see that this stock has been uptrending strong over the last month and change, with shares moving higher from its low of $5.92 to its recent high of $9.50 a share. During that move, shares of MOBI have been making mostly higher lows and higher highs, which is bullish technical price action. This move has now pushed shares of MOBI within range of triggering a big breakout trade above some key overhead resistance levels.
Traders should now look for long-biased trades in MOBI if it manages to break out above some key overhead resistance levels at $9.50 to $9.64 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 volume of 769,022 shares. If that breakout develops soon, then MOBI will set up to re-test or possibly take out its next major overhead resistance level at its 52-week high of $12.69 a share.
Traders can look to buy MOBI off weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support levels at $8.56 to $8 a share. One can also buy MOBI 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.
Groupon
Another under-$10 technology player that's starting to move within range of triggering a near-term breakout trade is Groupon (GRPN), which operates online local commerce marketplaces that connect merchants to consumers by offering goods and services at a discount worldwide. This stock has been hit hard by the sellers so far in 2014, with shares off sharply by 39%.
If you look at the chart for Groupon, you'll see that this stock formed a double bottom chart pattern back in August at $5.68 to $5.75 a share. Following that bottom, shares of GRPN have started to rip sharply higher with the stock moving back above its 50-day moving average. That move has now pushed shares of GRPN 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 GRPN if it manages to break out above some near-term overhead resistance levels at $7.23 to $7.28 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 16.20 million shares. If that breakout hits soon, then GRPN will set up to re-test or possibly take out its next major overhead resistance levels at $7.75 to its 200-day moving average of $7.96 a share. Any high-volume move above those levels will then give GRPN a chance to tag its gap-down-day high from March at around $9 a share.
Traders can look to buy GRPN off weakness to anticipate that breakout and simply use a stop that sits right below its 50-day moving average of $6.44 a share. One can also buy GRPN 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.
Renren
One final under-$10 technology player that's trending very close to triggering a big breakout trade is Renren (RENN) , which operates a social networking Internet platform in the People's Republic of China. This stock is off to a decent start so far in 2014, with shares up notably higher by 14.7%.
If you take a glance at the chart for Renren, you'll notice that this stock has been consolidating and trending sideways for the last five months and change, with shares moving between $3.10 on the downside and $3.65 on the upside. Shares of RENN have recently started to spike higher back above both its 50-day and 200-day moving averages. That spike is now starting to push shares of RENN within range of triggering a big breakout trade above the upper-end of its recent sideways trading chart pattern.
Traders should now look for long-biased trades in RENN if it manages to break out above some near-term overhead resistance levels at $3.60 to $3.65 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 700,958 shares. If that breakout triggers soon, then RENN will set up re-test or possibly take out its next major overhead resistance levels at $4.40 to its 52-week high at $4.79 a share.
Traders can look to buy RENN off weakness to anticipate that breakout and simply use a stop that sits right below its 50-day moving average of $3.29 a share or near some more key support at $3.10 a share. One can also buy RENN 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.
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