5 Under-$10 Stocks Due to Surge

Tickers in this article: ACW ASTX DRD ENVI OSIR
WINDERMERE, Fla. ( Stockpickr) -- There isn't a day that goes by on Wall Street when certain stocks trading for $10 a share or less don't experience massive spikes higher. Traders savvy enough to follow the low-priced names and trade them with discipline and sound risk management are banking ridiculous coin on a regular basis.

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Just take a look at some of the hot movers in the under-$10 complex from Wednesday, including SGOCO Group (SGOC) , which skyrocketed by 56%; First Security Group (FSGI) , which soared by 27.8%; SMART Technologies (SMT) , which trended higher by 10.8%; and AVEO Pharmaceuticals (AVEO) , which surged by 9.1%. You don't even have to catch the entire move in lower-priced stocks such as these to make outsized returns when trading.

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.

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With that in mind, here's a look at several under-$10 stocks that look poised to potentially trade higher from current levels.

Astex Pharmaceuticals

One under-$10 stock that's setting up to break out here is Astex Pharmaceuticals (ASTX) , which is dedicated to the discovery and development of novel small molecule therapeutics with a focus on oncology and hematology. This stock has been on fire during the last six months, with shares soaring higher by 38%.

This company received some bullish news this morning, when a case report published online by Pediatrics said patients in a trial of Astex's drug Dacogen achieved complete remission.

If you take a look at the chart for Astex Pharmaceuticals, you'll notice that this stock has uptrending modestly for the past two months, with shares moving higher from a low of $2.15 to its intraday high of $3.06 a share. During that uptrend, shares of ASTX have been mostly making higher lows and higher highs, which is bullish technical price action. That move has now pushed ASTX within range of triggering a near-term breakout trade.