These under-$10 stocks are within range of triggering breakout trades.
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 monster movers to the upside in the under-$10 complex from Wednesday, including MoSys (MOSY) , which ripped higher by 41.8%; Violin Memory(VMEM) , which jumped by 32.3%; Aegerion Pharmaceuticals (AEGR) , which soared by 28.5%; and MGT Capital Investments (MGT) , which spiked big by 27.6%. 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. These are also the exact type of stocks that I love to trade and alert to my subscribers 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.
Golden Minerals
One under-$10 basic materials player that's starting to trend within range of triggering a near-term breakout trade is Golden Minerals (AUMN) , which engages in mining, construction and exploration of mineral properties. This stock has been in play with the bulls over the last six months, with shares exploding higher by 142.4%.
Market players should now look for long-biased trades in shares of Golden Minerals if it manages to break out above its 50-day moving average of 55 cents per share and then above more near-term overhead resistance levels at 56 to 61 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 of 598,542 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 75 to 87 cents, or even its 52-week high of 94 cents per share.
Traders can look to buy this stock off weakness to anticipate that breakout and simply use a stop that sits right around its 20-day moving average of 41 cents per share. One can also buy shares of Golden Minerals 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
InvenSense
An under-$10 technology stock that's starting to trend within range of triggering a near-term breakout trade is InvenSense (INVN) , which designs, develops, manufactures, markets and sells sensor systems on a chip in the U.S., China, Taiwan, South Korea, Japan, France, Canada, Slovakia and Italy. This stock has been smacked lower by the sellers over the last six months, with shares down by 38.2%.
If you take a look at the chart for InvenSense, you'll notice that this stock spiked notably higher on Wednesday right off its 20-day moving average of $6.17 a share with strong upside volume flows. Volume for that trading session registered over 1.50 million shares, which is well above its three-month average action of 1.19 million shares. That high-volume spike to the upside is now quickly pushing shares of InvenSense 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 InvenSense if it manages to break out above some near-term overhead resistance levels at $6.50 to $6.60 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 1.19 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 its 50-day moving average of $7 to $7.50, or even $8 to $8.66 a 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 at $5.97 a share. One can also buy shares of InvenSense 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.
