Stock Quotes in this Article: CCRN, CCRT, VSCP, BGMD, GTAT

WINDERMERE, Fla. (Stockpickr) -- There isn’t a day that goes by on Wall Street when certain stocks trading near or 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 sound risk management are banking ridiculous coin on a regular basis.

Just take a look at some of the hot movers on Thursday in the under-$10 complex, including Princeton National Bancorp (PNBC), which soared 85%; MGT Capital Investments (MGT), which closed up an unreal 65%; Deer Consumer Products (DEER), which ended up a whopping 44%; and OptimumBank (OPHC), which soared to close up 30%. You don’t even have to catch the entire move in lower-priced stocks such as these to make outsized returns when trading.

>>5 Big Stocks to Trade for Gains

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.

Cross Country Healthcare


One under-$10 stock that could be setting up for some decent upside is Cross Country Healthcare (CCRN), which is engaged in the business of healthcare staffing services offering a range of staffing and outsourcing services to the healthcare market. This stock has not done much so far in 2012, with shares off by around 8%.

If you take a look at the chart for Cross Country Healthcare, you’ll notice that this stock recently dropped from its 2012 high of $6.73 a share to its yearly low of $4.40 a share. Since that big drop, shares of CCRN have started to rebound, and a number of up days have registered very strong volume flows. That recent uptrend has also pushed the stock within range of triggering a near-term breakout trade.

>>6 Hot Stocks on Traders' Radars

Market players should now look for long biased trades in CCRN of this stock can manage to break out above some near-term overhead resistance at $5.37 a share, and above its 200-day moving average of $5.52 and its 50-day moving average of $5.66 with high volume. A sustained high-volume move and close over those levels should set this stock up trend sharply higher. Look for volume on that move that registers near or well above its three-month average volume of 136,948 shares. Volume on Thursday hit 493,505 shares and the stock closed at $5.06, which was well of its daily high of $5.30 a share.

If we get that action soon, then traders should look for a potential run back toward its recent high of $6.73 a share or possibly much higher. I would simply avoid any long trades in CCRN if it moves back below some near-term support at around $4.75 a share or if it fails to trigger that breakout soon. Keep in mind that before the recent drop in CCRN, this stock had been uptrending strong. The play here is to look for CCRN to move back into that uptrend if those overhead resistance levels I highlighted can be taken out soon.

Compucredit

Another under-$10 stock that’s within a stone’s throw of a major breakout trade is Compucredit (CCRT), a provider of various credit and related financial services and products to or associated with the financially underserved consumer credit market. This stock is off to an extremely hot start in 2012, with shares up over 60%.

If you take a look at the chart for Compucredit, you’ll notice that this stock has been crazy hot for the last six months, with shares uptrending from its October low of $2.53 to its current price of $6 a share. During that monster uptrend, shares of CCRT have been consistently making higher lows and higher highs, which is bullish price action. That major uptrend has now pushed CCRT within range of triggering a big near-term breakout trade.

>>7 Improving Credit Card Stocks

Traders should now look for long-biased trades in CCRT if this stock can manage to break out above some near-term overhead resistance at $6 a share with high-volume. Look for volume on that move that hits near or well above its three-month average action of 26,805 shares. At last check, volume on Thursday registered 150,364 shares and the stock closed right at $6 a share.

Traders should now watch for any sustained high-volume move and close above $6 to signal that CCRT wants to trend much higher. If we start to see CCRT take out $6 soon with volume, then this stock has a great chance to run-up towards its next significant overhead resistance levels at $7 to $7.37 or possibly much higher. Consider how strong CCRT was on Thursday and the high-volume, this stock has a great chance to make that run in the near-term.

Keep in mind that this stock is a favorite of the short-sellers. The current short interest as a percentage of the float for CCRT is an extremely high 25.3%. Not much is worse for a short-seller than being short a stock that’s about to break out with high-volume. I would simply avoid any long trades in CCRT if it fails to break out over $6 soon, or if it drops below Thursday’s low of $5.34 with volume.

BG Medicine

One under-$10 name in the biotechnology and drugs complex that could be setting up for a solid move higher is BG Medicine (BGMD), a life sciences company focused on the discovery, development and commercialization of diagnostic tests based on iomarkers. This stock is off to a strong start in 2012, with shares up over 30% so far.

If you take a look at the chart for BG Medicine, you’ll notice that this stock just dropped huge from its February high of $12.80 to a recent low of $5.27 a share. Before that monster drop, shares of BGMD had been uptrending solidly and making mostly higher lows and higher highs. Now the stock has started to bounce and move back above its 200-day moving average of $5.80 a share, and it’s within range of triggering a near-term breakout trade.

>>5 Stocks Under $5 Making Big Moves

Traders should consider long biased trades in BGMD if the stock can manage to break out above some near-term overhead resistance levels at $6.34 to $6.35 a share, and above its 50-day moving average of $6.80 a share with heavy volume. Look for volume on a move above those levels that’s near or above its three-month average volume of 18,210 shares. Traders should look for a sustained high-volume move and close above those levels to signal that BGMD wants to trend much higher.

If we get that action soon, look for BGMD to make a run at its next significant overhead resistance levels at $8 to $8.25 a share or possibly much higher. At last check, volume on Thursday registered 88,959 shares and the stock closed at $6.31 which was a bit off its daily high of $6.71 a share. I would simply avoid any long traders in BGMD if it moves back below its 200-day moving average of $5.80 with heavy volume, or if that breakout fails to trigger soon with high-volume.

GT Advanced Technologies

Another under-$10 name that could be ready to breakout and trend significantly higher is GT Advanced Technologies (GTAT), which provides polysilicon production technology and multicrystalline ingot growth systems, and related photovoltaic manufacturing services for the solar industry worldwide. This stock is up modestly so far in 2012, with shares higher by around 12%.

If you take a look at the chart for GT Advanced Technologies, you’ll see that this stock recently topped out at around $9.89 to $9.80 a share, and then fell to a low of $7.46. After printing that low, the stock has started to uptrend a bit and so far has made higher lows, which is bullish price action. Now shares of GTAT are quickly approaching a near-term breakout trade, and it’s within range of moving back above its 50-day moving average of $8.61.

>>4 Chip Stocks Smart Money Is Buying

Traders should now look for long biased trades in GTAT if it can manage to take out some near-term overhead resistance at $8.60 to $8.61 (50-day) with high-volume volume. Look for volume on that move that registers near or well above its three-month average action of 2,146,790 shares. At last check, volume on Thursday registered 4.49 million shares and the stock closed just a bit off its daily highs at $8.12 a share.

If that breakout triggers soon for GTAT, traders should look for a move back towards its recent high of $9.80 to $9.89 a share or possibly much higher. In fact, of GTAT triggers that near-term breakout and then takes out $9.89 with volume look for more upside towards $11 to $12 a share.

Traders should make note of the fact that GTAT is a heavily shorted stock. The current short interest as a percentage of the float for GTAT is very high at 15.4%. That high short interest could easily fuel a large spike higher if those resistance levels I highlighted are taken out soon with high volume. I would simply avoid any long trades in GTAT if it fails to get back above its 50-day with volume.

VirtualScopics

An under-$10 stock in the medical equipment and supplies complex that’s quickly approaching a big breakout trade is VirtualScopics (VSCP), a provider of quantitative imaging for clinical trials serving the pharmaceutical, biotechnology and medical device industries. This stock has been red hot so far in 2012, with shares up over 60%.

If you take a look at the chart for VirtualScopics, you’ll see that this stock has been uptrending very strong since the start of 2012. Shares of VirtualScopics have run up from its recent low of 80 cents per share to its current price of just under $1.50 a share. During that uptrend, this stock has consistently made higher lows and higher highs, which is bullish price action. The stock has also just experienced a 50-day moving average ($1.27) crossover of its 200-day moving average ($1.24), which is a bullish technical sign. This monster uptrend has now pushed the stock within range of triggering a major near-term breakout trade.

Traders should now look for long biased trades in VSCP if this stock can manage to break out above some near-term overhead resistance at $1.55 a share with high-volume. Look for volume on that move that registers near or well above its three-month average volume of 43,242 shares. At last check, volume on Thursday registered 78,000 shares and the stock closed at $1.48.

If that breakout for VSCP triggers soon with volume, then traders should look for a substantial move higher towards its next significant overhead resistance levels at $1.89 to $2 a share or possibly even $2.25 a share. Look for that move as long as VSCP is trending above $1.55 with strong upside volume lows. I would simply avoid this stock from the long side if it fails to trigger that breakout, or if it moves back below $1.30 a share with volume.

To see more hot under-$10 stocks, check out the Stocks Under-$10 Setting Up To Trade Higher portfolio on Stockpickr.

-- Written by Roberto Pedone in Winderemere, Fla.

RELATED LINKS:

>>7 Companies That Keep on Growing
>>5 Stocks Insiders Love Right Now

>>10 Dow Dogs That Are Barking for Gains

Follow Stockpickr on Twitter and become a fan on Facebook.

At the time of publication, author had no positions in stocks mentioned.

Roberto Pedone, based out of Windermere, Fla., is an independent trader who focuses on stocks, options, futures, commodities and currencies. He is also an outside contributor to Beconequity.com and maintains the website Maddmoney.net, which he sold to Blue Wave Advisors in 2008. Roberto studied International Business at The Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany.