5 Stocks Under $10 Triggering Breakouts
Just take a look at some of the hot movers in the under-$10 complex from Wednesday, including Chelsea Therapeutics
One low-priced stock that recently exploded higher was chemical manufacturing player BioFuel Energy
Guess what happened? Shares of BIOF started to trigger that breakout trade on Feb. 14 with above-average volume after the stock closed at $5.50 a share. The following day, BIOF exploded to the upside with huge volume and closed at $6.83 a share. The stock went on to hit a near-term high of $7.25 on Feb. 19, which represents a massive gain for anyone who played that breakout. The best part about this BIOF trade was that market players had plenty of conformation that a big move was possible because heavy upside volume was flowing into the stock as it took out those key resistance levels.
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.
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 several under-$10 stocks that look poised to potentially trade higher from current levels.