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.
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.
Transition Therapeutics
One under-$10 biopharmaceutical player that's starting to trend within range of triggering a major breakout trade is Transition Therapeutics (TTHI), which researches and develops therapeutic agents for disease indications in Canada. This stock has been destroyed by the sellers over the last three months, with shares down sharply by 69.6%.
If you take a glance at the chart for Transition Therapeutics, you'll notice that this stock gapped down huge back in June from around $9.30 to $2.11 a share with massive downside volume. Following that move, shares of Transition Therapeutics have been consolidating and trending sideways, with shares moving between $1.95 on the downside and $2.53 on the upside. This stock has now started to spike a bit higher off some near-term support at $2 a share and it's beginning to move within range of triggering a major breakout trade above the upper-end of its recent sideways trending chart pattern.
Market players should now look for long-biased trades in shares of Transition Therapeutics if it manages to break out above its 20-day moving average of $2.22 to $2.30 and then above more key near-term overhead resistance levels at $2.40 to $2.53 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 178,942 shares. If that breakout develops soon, then this stock will set up to re-test or possibly take out its next major overhead resistance level at its gap-down-day high of $3.23 a share. Any high-volume move above that level will then give this stock a chance to re-fill some of its previous gap-down-day zone that started at $9.30 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 $2 to $1.95 a share. One can also buy shares of Transition Therapeutics 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.
LinnCo
Another under-$10 stock that's starting to spike within range of triggering a big breakout trade is LinnCo (LNCO - Get Report), which focuses on the acquisition and development of oil and natural gas properties in the U.S. This stock has been decimated by the bears over the last three months, with shares down huge by 72.2%.
If you take a look at the chart for LinnCo, you'll notice that this stock has been downtrending badly over the last three months and change, with shares collapsing from its high of $12.35 to its recent low of $2.79 a share. During that downtrend, shares of LinnCo have been consistently making lower highs and lower lows, which is bearish technical price action. This move has now pushed shares of LinnCo into extremely oversold levels, since its current relative strength index reading is 25.9. Oversold can always get more oversold, but it's also an area where a stock can make a powerful bounce higher from.
Market players should now look for long-biased trades in LinnCo if it manages to break out above some near-term overhead resistance levels at $3.46 to $3.75 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 2.08 million shares. If that breakout gets going soon, then this stock will set up to re-test or possibly take out its next major overhead resistance levels just above $4 a share to its 20-day moving average of $4.73, or even around $5.30 a share.
Traders can look to buy this stock off weakness to anticipate that breakout and simply use a stop that sits right below $3 share. One can also buy shares of LinnCo 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.
One under-$10 clinical-stage biopharmaceutical player that's starting to trend within range of triggering a big breakout trade isCaladrius Biosciences (CLBS - Get Report), which develops cell based therapeutics in the U.S. This stock has been smoked lower by the sellers over the last six months, with shares down large by 61.5%.
If you take a glance at the chart for Caladrius Biosciences, you'll notice that this stock has been downtrending badly over the last five months, with shares dropping sharply lower from over $4 a share to its new 52-week low of $1.10 a share. During that downtrend, this stock has been making mostly lower highs and lower lows, which is bearish technical price action. That said, this stock has now started to rebound sharply off that $1.10 low and off extremely oversold levels, and it's quickly moving within range of triggering a near-term breakout trade above some key overhead resistance levels.
Traders should now look for long-biased trades in Caladrius Biosciences if it manages to break out above some near-term overhead resistance levels at $1.50 to $1.51 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 778,312 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 20-day moving average of $1.66 to $1.75, or even its 50-day moving average of $1.87 to $2 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 at $1.25 a share. One can also buy shares of Caladrius Biosciences 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.
Pacific Ethanol
Pacific Ethanol
Another under-$10 stock that's starting to spike within range of triggering a big breakout trade is Pacific Ethanol (PEIX - Get Report), which produces and markets low-carbon renewable fuels in the Western U.S. This stock has been smacked lower by the bears over the last three months, with shares off sharply by 35.4%.
If you look at the chart for Pacific Ethanol, you'll see that this stock has been downtrending badly over the last three months and change, with shares falling sharply lower from its high of $13.70 to its new 52-week low of $7.05 a share. During that downtrend, shares of Pacific Ethanol have been consistently making lower highs and lower lows, which is bearish technical price action. That said, this stock has been attempting to carve out a near-term bottom over the last month, with shares finding some buying interest each time it has traded near $7 a share. Shares of Pacific Ethanol have now started to spike higher off $7 support level and it's quickly moving within range of triggering a big breakout trade.
Market players should now look for long-biased trades in Pacific Ethanol if it manages to break out above some near-term overhead resistance levels at $7.94 to $8.26 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 954,561 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 its 50-day moving average of $9.31 to $10, or even its 200-day moving average of $10.69 a share.
Traders can look to buy Pacific Ethanol off weakness to anticipate that breakout and simply use a stop that sits right around some near-term support levels at $7.50 to $7 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.
Amkor Technology
One final under-$10 semiconductor player that's starting to rip higher within range of triggering a big breakout trade is Amkor Technology (AMKR - Get Report), which provides outsourced semiconductor packaging and test services in the U.S., China, Ireland, Japan, Singapore, Taiwan, Thailand, and internationally. This stock has been driven lower by the sellers over the last six months, with shares down sharply by 50.1%.
If you take a glance at the chart for Amkor Technology, you'll notice that this stock has been downtrending horrible over the last six months, with shares collapsing lower from its high of near $10 a share to its new 52-week low of $4.01 a share. During that move, shares of Amkor Technology have been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of Amkor Technology started to spike higher on Thursday right above its 52-week low of $4.01 a share with above-average volume. Volume for that trading session registered over 1.89 million shares, which is well above its three-month average action of 1.41 million shares. That spike is now quickly pushing this stock within range of triggering a big breakout trade above some key near-term overhead resistance levels.
Traders should now look for long-biased trades in Amkor Technology if it manages to break out above some key near-term overhead resistance levels at $4.57 to its 20-day moving average of $4.67 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 1.41 million shares. If that breakout gets underway soon, then this stock will set up to re-fill some of its previous gap -down-day zone from late July that started above $5 a share. If that gap gets filled with volume, then this stock could easily tag its next major overhead resistance levels at $5.40 to its 50-day at $5.56, or even $6 to $6.50 a share.
Traders can look to buy Amkor Technology off weakness to anticipate that breakout and simply use a stop that sits right below its 52-week low of $4.01 a share. One can also buy this stock off strength once it starts to rip 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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