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 Prima Biomed (PBMD), which exploded higher by 269%; IsoRay (ISR), which screamed to the upside by 93.7%; CymaBay Therapeutics (CBAY), which soared higher by 31.6%; and Great Basin Scientific (GBSN), which ripped higher by 26.1%. You don't even have to catch the entire move in lower-priced stocks such as these to make outsized returns when trading.
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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.
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Achaogen
One under-$10 biotechnology player that's starting to spike within range of triggering a major breakout trade is Achaogen (AKAO -Get Report), which discovers, develops and commercializes antibacterials to treat multi-drug resistant gram-negative infections in the U.S. This stock has been slammed lower by the bears over the last three months, with shares off large by 50.6%.
If you take a glance at the chart for Achaogen, you'll see that this stock has been downtrending badly for the last six months, with shares plunging lower from its high near $14.50 a share to its new 52-week low of $5.30 a share. During that downtrend, shares of AKAO have been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of AKAO have now started to rebound off that $5.30 low with some above-average volume flows. That rebound is now starting to push shares of AKAO within range of triggering a major breakout trade above a key downtrend line.
Market players should now look for long-biased trades in AKAO if it manages to clear that downtrend line that will trigger above $5.76 to $6.07 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 155,502 shares. If that breakout gets going soon, then AKAO will set up to re-test or possibly take out its next major overhead resistance levels at $6.59 to $7 a share, or even its 50-day moving average of $7.48 to $8 a share.
Traders can look to buy AKAO off weakness to anticipate that breakout and simply use a stop that sits right around that new 52-week low of $5.30 a share. One can also buy AKAO 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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Synergy Pharmaceuticals
Another under-$10 biopharmaceutical player that's starting to trend within range of triggering a near-term breakout trade is Synergy Pharmaceuticals (SGYP), which focuses on the development of drugs to treat gastrointestinal disorders and diseases. This stock has been in play with the bulls over the last three months, with shares trending sharply higher by 39.3%.
If you take a look at the chart for Synergy Pharmaceuticals, you'll notice that this stock gapped up sharply higher earlier this week from $3.40 to $4.17 a share with monster upside volume. Following that move, shares of SGYP have pulled back a bit, but for the most part the stock has held or found buying interest right around that gap-up day low just under $3.80 a share. Shares of SGYP formed a bullish hammer candle pattern on Wednesday and this stock now looks ready to triggering a near-term breakout trade.
Market players should now look for long-biased trades in SGYP if it manages to break out above some key near-term overhead resistance levels at around $4.05 to $4.17 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 2 million shares. If that breakout materializes soon, then SGYP will set up to re-test or possibly take out its next major overhead resistance levels at $4.50 to its 52-week high of $4.68 a share. Any high-volume move above those levels will then give SGYP a chance to tag $5 to $5.50, or even $6 a share.
Traders can look to buy SGYP off weakness to anticipate that breakout and simply use a stop that sits just below $3.80 a share. One can also buy SGYP 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.
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Amedica
One under-$10 stock that's starting to spike within range of triggering a big breakout trade is Amedica (AMDA - Get Report), which develops, manufactures and sells a range of medical devices based on its silicon nitride technology platform in the U.S., Europe and South America. This stock has been destroyed by the bears over the last three months, with shares plunging lower by 70%
If you take a glance at the chart for Amedica, you'll notice that this stock has been attempting to carve out a major bottoming chart pattern over the last two months, with shares making slightly higher lows at three price points of 20 cents, 21 cents and 22 cents per share. Shares of AMDA have now started to bounce a bit higher here right above those support levels, and it's starting to trend within range of triggering a big breakout trade above a key downtrend line.
Traders should now look for long-biased trades in AMDA if it manages to clear that downtrend line which will trigger over 26 to 27 cents per 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 1.61 million shares. If that breakout triggers soon, then AMDA will set up to re-test or possibly take out its next major overhead resistance levels at 30 to 33 cents per share, or even 35 38 cents per share.
Traders can look to buy AMDA off weakness to anticipate that breakout and simply use a stop that sits right below some significant support t levels at 22 to 20 cents per share. One can also buy AMDA 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.
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Pernix Therapeutics
Another under-$10 specialty pharmaceutical player that's starting to trend within range of triggering a big breakout trade is Pernix Therapeutics (PTX - Get Report), which develops, manufactures, markets and sells branded and generic pharmaceutical products. This stock has been smashed lower by the bears over the last six months, with shares down sharply by 36.7%.
If you look at the chart for Pernix Therapeutics, you'll notice that this stock has been trending sideways and consolidating over the last month, with shares moving between $6.03 on the downside and $7.10 on the upside. This sideways trend is coming after shares of PTX gapped down and trended lower in April from around $10.50 a share to $6.15 a share. Shares of PTX are now starting to spike higher right around its recent range lows and it's beginning to move within range of triggering a big breakout trade.
Market players should now look for long-biased trades in PTX if it manages to break out above Wednesday's high of $6.77 and then above its recent range high of $7.10 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 1.25 million shares. If that breakout kicks off soon, then PTX will set up to re-test or possibly take out its next major overhead resistance levels at $7.50 to $8 a share, or even $8.50 to $9 a share. Any high-volume move over $9 will then give PTX a chance to re-fill some of its previous gap-down-day zone form April that started at $10.50 a share.
Traders can look to buy PTX off weakness to anticipate that breakout and simply use a stop that sits just below its recent low of $6.03 a share. One can also buy PTX 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.
Care.com
One final under-$10 stock that's starting to trend within range of triggering a big breakout trade is Care.com (CRCM - Get Report), which operates an online marketplace for finding and managing family care. This stock has been driven down hard by the sellers over the six months, with shares off by 27.2%.
If you take a glance at the chart for Care.com, you'll see that this stock has been downtrending badly for the last for months, with shares dropping lower from its high of $8.50 to its Wednesday low of $5.65 a share. During that downtrend, shares of CRCM have been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of CRCM ripped higher off that $5.65 low with volume and the stock formed a bullish hammer candle. That move has now pushed shares of CRCM within range of triggering a major breakout trade above a key downtrend line.
Traders should now look for long-biased trades in CRCM if it manages to break out above that key downtrend line that will trigger over $6.40 to $6.54 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 129,729 shares. If that breakout gets set off soon, then CRCM will set up to re-test or possibly take out its next major overhead resistance levels at $6.80 to $7.13 a share, or even $7.50 to $8 a share.
Traders can look to buy CRCM off weakness to anticipate that breakout and simply use a stop that sits right below $6 a share or around $5.80 a share. One can also buy CRCM 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.
By Roberto Pedone
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