One low-priced stock that recently exploded higher was private mortgage insurer in the U.S. MTG Investment, which I highlighted in Feb. 28's "8 Stocks Under $10 Moving Higher" at around $3 a share. I mentioned in that piece that shares of MTG were soaring higher back above its 50-day moving average of $2.76 a share with monster upside volume. That move was quickly pushing MTG within range of triggering a breakout trade above some near-term overhead resistance levels at $2.96 to $3.33 a share.
Guess what happened? Shares of MTG Investment triggered that breakout the following day with heavy upside volume. The stock continued to explode higher in the following days with shares hitting a high of $6.19 on Wednesday. That's a monster gain for anyone who played the breakout and the best part about it is that volume was strong which raised the probability of a huge move.
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.
Synacor
One under-$10 stock that's trending very close to trigger a major breakout trade is Synacor, a provider of authentication and aggregation solutions for delivery of online content and services. This stock has been hammered by the bears so far in 2013, with shares down by 41 percent.
If you take a look at the chart for Synacor, you'll notice that this stock recently plunged lower from its high of $5.69 to its low of $2.72 a share with heavy downside volume. That move has pushed shares of Synacor into oversold territory, since its current relative strength index reading is 31.32. Shares of Synacor have also started to uptrend since that huge fall, with shares moving higher from its low of $2.72 to its recent high of $3.29 a share. That move has quickly pushed shares of Synacor within range of triggering a major breakout trade.
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Traders should now look for long-biased trades in Synacor if it manages to break out above some near-term overhead resistance $3.29 to $3.36 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 of 697,488 shares. If that breakout triggers soon, then SYNC will set up to re-test or possibly take out its next major overhead resistance level at its 50-day moving average of $4.96 a share.
Traders can look to buy Synacor off any weakness to anticipate that breakout and simply use a stop that sits just below some near-term support levels at $2.98 to $2.90 a share. One can also buy the stock off strength once it takes out those breakout levels with volume and then simply use a stop that sits just below $2.98 a share.
Progenics Pharmaceuticals
Another under-$10 stock that looks ready to trigger a near-term breakout trade is Progenics Pharmaceuticals, which develops and commercializes innovative therapeutic products to treat the unmet medical needs of patients with debilitating conditions and life-threatening diseases. This stock has been soaring higher during the last six months, with shares up 34.9 percent.
If you take a look at the chart for Progenics Pharmaceuticals, you'll notice that this stock has just started to trend back above its 50-day moving average of $2.95 a share. This stock has also started to move into breakout territory, since shares are moving above some near-term overhead resistance levels at $2.95 to $3.10 a share. That move is quickly pushing shares of Progenics within range of triggering another near-term breakout trade.
Market players should now look for long-biased trades in Progenics if it manages to break out above some near-term overhead resistance levels at $3.50 to $3.88 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 215,998 shares. If that breakout hits soon, then the stock will set up to re-test or possibly take out its next major overhead resistance levels at its 200-day moving average of $4.58 a share to $4.75 or even $6 a share.
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Traders can look to buy Progenics off any weakness to anticipate that breakout and simply use a stop that sits just below its 50-day at $2.95 a share. One can also buy off strength once Progenics takes out those breakout levels with volume and then simply use a stop that sits a few percentage points below $3.50 a share. I would add to either position if PGNX clears its 200-day at $4.58 a share and more resistance at $4.75 a share with volume.
Northwest Biotherapeutics
Another under-$10 stock that's trending very close to triggering a near-term breakout trade is Northwest Biotherapeutics, which is focused on discovering, developing and commercializing immunotherapy products that safely generate and enhance immune system responses to effectively treat cancer. This stock has been hit hard by the sellers during the last three months, with shares off by 31 percent.
Just this morning, this company announced that it expects to complete enrollment in its 312-patient phase III clinical trial for Glioblastoma multiforme brain cancer within a period that is faster or more efficient than relevant comparison trials with immune therapies for the same brain cancer.
If you take a look at the chart for Northwest Biotherapeutics, you'll notice that this stock has been trading inside of a consolidation pattern for the last three months, with shares moving between $2.98 on the downside and around $4 on the upside. Shares of Northwest Biotherapeutics have started to trend back above its 50-day moving average of $3.28 a share and are now quickly moving within range of triggering a near-term breakout trade above the upper-end of its recent range.
Traders should now look for long-biased trades in Northwest Biotherapeutics if it manages to break out above some key overhead resistance levels at $3.59 to $4 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 volume of 129,359 shares. If that breakout triggers soon, then NWBO will set up to re-test or possibly take out its next major overhead resistance levels at its 200-day of $4.59 a share to $6 a share. Any high-volume move above $6 will then put $6.50 to $7 into range for shares of Northwest Biotherapeutics.
Traders can look to buy Northwest Biotherapeutics off any weakness to anticipate that breakout and simply use a stop that sits right below its 50-day moving average of $3.28 a share or near more support at $3.20 a share. One could also buy the stock off strength once it clears those breakout levels with volume and simply use a stop that sits just below its 50-day at $3.28 a share.
Quicklogic
Another under-$10 stock that's starting to move within range of triggering a near-term breakout trade is Quicklogic, a semiconductor company that develops and markets low-power programmable solutions that enable customers to add features to their mobile, consumer and industrial products. This stock is off to a decent start in 2013, with shares up by 8.7 percent.
If you take a look at the chart for Quicklogic, you'll notice that this stock has been trending inside of a consolidation pattern for the last two months, with shares moving between $2 on the downside and $2.45 on the upside. Shares of Quicklogic have just started to trend back above its 50-day moving average of $2.20 a share and are quickly moving within range of triggering a near-term breakout trade above the upper end of its recent range.
Market players should now look for long-biased trades in Quicklogic if it manages to break out above its 200-day moving average at $2.41 a share and then once it clears more near-term overhead resistance at $2.45 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 184,318 shares. If that breakout triggers soon, then the stock will set up to re-test or possibly take out its next major overhead resistance levels at $3.02 to $3.05 a share. Any high-volume move above those levels will then put $3.29 to $3.60 into range for shares of Quicklogic.
Traders can look to buy Quicklogic off any weakness to anticipate that breakout and simply use a stop that sits right below its 50-day moving average of $2.20 a share or around $2.10 to $2 a share. One could also buy Quicklogicoff strength once it takes out those breakout levels with volume and then simply use the same stop right around its 50-day at $2.20 a share.
Raptor Pharmaceuticals
One more under-$10 stock that's trending very close to triggering a near-term breakout trade is Raptor Pharmaceuticals, which researches, produces and delivers medicines. Its pipeline includes both candidates from its proprietary drug targeting platforms and in-licensed and acquired product candidates. This stock has trended lower so far in 2013, with shares off by 9.9 percent.
If you take a look at the chart for Raptor Pharmaceuticals, you'll see that this stock has just started to trend back above its 200-day moving average of $5.20 a share with heavy upside volume flows. This move is quickly pushing shares of Raptor Pharmaceuticals within range of triggering a near-term breakout trade.
Traders should now look for long-biased trades in Raptor Pharmaceuticals if it manages to break out above some near-term overhead resistance at $5.29 a share to its 50-day at $5.40 a share and then above more resistance at $5.56 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 of 403,825 shares. If that breakout triggers soon, then the stock will set up to re-test or possibly take out its next major overhead resistance levels at $5.95 to $6.28 a share. Any high-volume move above $6.28 will then put $7 to $7.50 into range for shares of Raptor Pharmaceuticals.
Traders can look to buy Raptor Pharmaceuticals off any weakness to anticipate that breakout and simply use a stop that sits right below its 200-day at $5.20 a share or around $5 a share. One could also buy the stock off strength once it clears those breakout levels with volume and then simply use the same stop that sits just below its 200-day at $5.20 a share. I would add to either position if Raptor Pharmaceuticals takes out $5.56 a share with volume.
