DELAFIELD, Wis. (Stockpickr) -- There isn't a day that goes by on Wall Street when certain stocks trading for $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 monster movers to the upside in the under-$10 complex from Wednesday, including China Shengda Packaging (CPGI), which exploded higher by 40.7%; Oragenics (OGEN), which soared higher by 38.6%; Andatee China Marine Fuel (AMCF), which spiked sharply higher by 35%; and Opexa Therapeutics (OPXA), which ripped higher by 24.9%. 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.
China Ming Yang Wind Power Group
One under-$10 industrial goods player that's starting to trend within range of triggering a near-term breakout trade is China Ming Yang Wind Power (MY - Get Report), which designs, manufactures, sells, and services megawatt-class wind turbines in the People's Republic of China. This stock has been exploding to the upside over the last three months, with shares sharply higher by 49%.
If you take a glance at the chart for China Ming Yang Wind Power, you'll see that this stock has been uptrending a bit during the month of June, with shares moving higher from its low of $3 to its recent high of $3.29 a share. During that uptrend, shares of China Ming Yang Wind Power Group have 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 above some key overhead resistance levels.
Market players should now look for long-biased trades in shares of China Ming Yang Wind Power if it manages to break out above some near-term overhead resistance levels at $3.29 to around $3.40 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 983,275 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 $3.64 to $3.82 a share, or even its 52-week high of $3.88 to $4.34 a share.
Traders can look to buy this stock off weakness to anticipate that breakout and simply use a stop that sits just below some key near-term support levels at 3.06 to $3 a share. One can also buy shares of China Ming Yang Wind Power off strength once it takes out those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.
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Aeterna Zentaris
Another under-$10 specialty biopharmaceutical player that's starting to trend within range of triggering a near-term breakout trade is (AEZS - Get Report), which engages in developing and commercializing novel treatments in oncology, endocrinology, and women's health. This stock has been smacked lower by the sellers over the last three months, with shares off by 42%.
If you take a look at the chart for Aeterna Zentaris, you'll notice that this stock has been consolidating a bit over the last few weeks, with shares moving between 26 cents on the downside and 33 cents on the upside. Shares of Aeterna Zentaris have started to spike higher right above some near-term support levels at 27 to 26 cents per share. That spike is 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 this stock if it manages to break out above some key near-term overhead resistance levels at 30 to 31 cents per share and then above 32 to 33 cents per 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 3.12 million 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 40 cents to its 50-day moving average of 46 cents, or even 50 to 55 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 26 cents per share. One can also buy shares of Aeterna Zentaris 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.
Synthesis Energy Systems
One under-$10 development stage energy player that's starting to trend within range of triggering a big breakout trade is Synthesis Energy Systems (SYMX - Get Report), which provides various proprietary gasification technology systems and solutions to the energy and chemical industries worldwide. This stock has been on fire over the last three months, with shares exploding higher by 96%.
If you take a glance at the chart for Synthesis Energy Systems, you'll notice that this stock has recently formed a double bottom chart pattern at $1.21 to $1.20 a share. Following that bottom, shares of Synthesis Energy Systems have started to spike sharply higher right off its 50-day moving average of $1.30 a share. That spike is now quickly pushing this stock within range of triggering a big breakout trade above some near-term overhead resistance levels.
Traders should now look for long-biased trades in Synthesis Energy Systems if it manages to break out above some key near-term overhead resistance levels at $1.52 to just above $1.60 to $1.70 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 946,812 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 $2.02 to its 52-week high of $2.10 a share.
Traders can look to buy Synthesis Energy Systems off weakness to anticipate that breakout and simply use a stop that sits right below its 50-day moving average of $1.30 a share or down near those double bottom support levels. 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.
Must Read: 5 Stocks Set to Soar on Bullish Earnings
Control4
Another under-$10 technology player that's starting to trend within range of triggering a big breakout trade is Control4 (CTRL - Get Report), which provides automation and control solutions for the connected home in the U.S., Canada, and internationally. This stock has been hit hard by the sellers over the last six months, with shares down sharply by 37%.
If you look at the chart for Control4, you'll notice that this stock recently formed a double bottom chart pattern at $8.75 to $8.86 a share. That bottom is coming after shares of Control4 gapped down sharply lower in April from $12.50 to $8.75 a share with heavy downside volume. This stock has now started to rebound following that gap to the downside and it's now quickly moving within range of triggering a major breakout trade above some key near-term overhead resistance levels.
Market players should now look for long-biased trades in Control4 if it manages to break out above some key near-term overhead resistance levels at $9.50 to $9.60 a share and then above its gap-down-day high of $9.92 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 221,475 shares. If that breakout develops soon, then this stock will set up to re-fill some of that previous gap-down-day zone from April that started near $12.50 a share.
Traders can look to buy Control4 off weakness to anticipate that breakout and simply use a stop that sits right below $9 a share or near those double bottom support levels. 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
By Roberto Pedone
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