5 Stocks Under $10 Poised to Move Higher
Just take a look at some of the hot movers in the under-$10 complex today, including NF Energy Saving (NFEC) , soaring an amazing 138%; China Recycling Energy (CREG) , spiking over 60%; Allos Therapeutics (ALTH) , jumping over 25%; and Cleantech Solutions (CLNT) , rising over 20%. You don't even have to catch the entire move in lower-priced stocks such as these to make outsized returns when trading.
I'm not as eager to recommend investing long-term in stocks that trade less than $10 a share because these names can be very speculative, and the odds for picking the long-term winners aren't great. But I definitely love to trade stocks that are priced below $10. I like to view them as a trading vehicle with lots of volatility and lots of upside when the trade is timed right.
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 five under-$10 stocks that look poised to potentially trade higher from current levels .
One under-$10 name that's starting to set up for a big breakout trade is Trius Therapeutics (TSRX) , a biopharmaceutical company focused on the discovery, development and commercialization of antibiotics for life threatening infections. This stock is off to a weak start in 2012, with shares off by around 25%.
If you take a look at the chart for Trius Therapeutics, you'll notice that this stock has been downtrending since last December, from a high of $8 to a recent low of $4.71 a share. During that downtrend, this stock consistently made lower highs and lower lows, which is bearish price action. That said, now the stock has started to make higher lows for the last month, and it's moving within range of triggering a near-term breakout.
Market players should now look for long-biased trades in TSRX if this stock can manage to break out above some near-term overhead resistance at $5.42 a share with high-volume. Look for volume on that move that hits near or well above its three-month average volume of 270,649 shares. If TSRX can sustain a move and close over $5.42 a share, then it will also mean the stock has pushed back above a significant downtrend line that starts at around $5.85 a share. This could signal that a significant trend change is underway for TSRX from bearish to bullish.