Stock Quotes in this Article: ACLS, DARA, RBCN, GEVO, SUPN

 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.

Just take a look at some of the hot movers in the under-$10 complex from Wednesday, including HMN Financial (HMNF), which skyrocketed by 39%; Jacksonville Bancorp (JAXB), which soared by 25.7%; Atlantic Coast Federal (ACFC), which ripped higher by 21.8%; and Consumer Portfolio Services (CPSS), which trended up by 10.4%. You don’t even have to catch the entire move in lower-priced stocks such as these to make outsized returns when trading.

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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.

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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.

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Rubicon Technology

One under-$10 stock that’s trending very close to triggering a major breakout trade is Rubicon Technology (RBCN), which manufactures synthetic electronic materials for opto-electronic, semiconductor fabrication, telecommunications and optical and laser applications. This stock has been hit hard by the bears during the last six months, with shares down by 30%.

If you take a look at the chart for Rubicon Technology, you’ll notice that this stock has been trending range bound for the last three months, with shares moving between $5.82 on the downside and $6.98 on the upside. Shares of RBCN have just started to move back above its 50-day moving average of $6.40 a share and it’s quickly moving within range of triggering a breakout trade above the upper-end of its recent sideways trading pattern.

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Traders should now look for long-biased trades in RBCN if it manages to break out above some near-term overhead resistance levels at $6.75 to $6.86 a share and then once it takes out more overhead resistance at $6.98 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 action of 334,422 shares. If that breakout triggers soon, then RBCN will set up to re-test or possibly take out its next major overhead resistance levels at its 200-day of $8.68 to $9.50 a share. Any move above $9.50 a share will then put $10 to $10.77 into focus for shares of RBCN.

Traders can look to buy RBCN off any weakness to anticipate that breakout and simply use a stop that sits right around some near-term support at $6.20 to $6 a share. One could also buy off strength once RBCN clears those breakout levels with volume and then simply use the same stop that sits right below its 50-day moving average of $6.40 a share.

This stock is a favorite target of the short sellers, since its current short interest as a percentage of its float is 20.9%. If that breakout triggers soon, then watch for a short-squeeze to develop that could send this stock flying higher in a very short timeframe.

Supernus Pharmaceuticals

Another under-$10 stock that’s trending within range of triggering a near-term breakout trade is Supernus Pharmaceuticals (SUPN), which is a specialty pharmaceutical company focused on developing and commercializing products for the treatment of central nervous system, or CNS, diseases. This stock has been destroyed by the sellers during the last six months, with shares off by 39%.

If you take a look at the chart for Supernus Pharmaceuticals, you’ll notice that this stock has been trending range-bound for the last two months, after gapping down from $11 a share in early December. That range-bound action has shares of SUPN moving between $6.75 on the downside and just below $8 a share on the upside. This stock has also started to trend higher off that low of $6.75 a share and it’s quickly moving within range of breaking out above the upper end of its recent sideways trading pattern.

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Market players should now look for long-biased trades in SUPN if it manages to break out above some near-term overhead resistance level $7.79 to $8 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 242,700 shares. If that breakout hits soon, then SUPN will set up to re-fill some of that previous gap down zone that started around $11 a share.

Traders can look to buy SUPN off any weakness to anticipate that breakout and then simply use a stop that sits close to some near-term support levels at $7 to $6.93 a share. One can also buy off strength once SUPN takes out those breakout levels with volume and then simply use a stop that sits just below $7.50 a share. I would add to either position once SUPN takes out its 50-day moving average of $8.55 a share with heavy volume.

Dara Biosciences

Another under-$10 name that’s trending very close to triggering a near-term breakout trade is Dara Biosciences (DARA), a specialty pharmaceutical company focused on the development and commercialization of oncology treatment and supportive care pharmaceutical products. This stock has been in play to the upside during the last six months, with shares up by 23%.

If you take a look at the chart for Dara Biosciences, you’ll notice that this stock recently formed a triple bottom chart pattern at 76 cents per share. Following that bottom, shares of DARA have started to move back above both its 50-day moving average at 81 cents per share and its 200-day moving average at 84 cents per share. That action is now quickly pushing DARA within range of triggering a near-term breakout trade.

Traders should now look for long-biased trades in DARA if it manages to break out above some near-term overhead resistance levels at 92 to 99 cents per 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 209,822 shares. If that breakout triggers soon, then DARA will set up to re-test or possibly take out its next major overhead resistance levels at $1.20 to $1.22 a share. Any high-volume move above those levels will then put $1.38 to $1.40 into range for shares of DARA.

Traders can look to buy DARA off any weakness to anticipate that breakout and then simply use a stop that sits right below its 50-day moving average of 81 cents per share. One could also buy DARA off strength once it clears those breakout levels with volume and then simply use a stop that sits just below 87 cents per share.

Axcelis Technologies

Another under-$10 name that’s trading close to triggering a major breakout trade is Axcelis Technologies (ACLS), which designs, manufactures and services ion implantation, dry strip and other processing equipment used in the fabrication of semiconductor chips in the U.S., Europe and Asia. This stock has been on fire during the last six months, with shares up a whopping 55%.

If you take a look at the chart for Axcelis Technologies, you’ll notice that this stock is exploding higher today right above some near-term support at $1.23 a share with decent upside volume. The volume so far this morning has registered 299,000 shares, which is just below its three-month action of 326,097 shares. This sharp move higher is quickly pushing shares of ACLS within range of triggering a major breakout trade.

Market players should now look for long-biased trades in ACLS if it manages to break out above some near-term overhead resistance levels at $1.40 to $1.45 a share and then once it takes out some past overhead resistance at $1.51 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 action of 326,097 shares. If that breakout triggers soon, then ACLS will set up to re-test or possibly take out its next major overhead resistance levels at $1.84 to $2.04 a share. Any high-volume move above $2.04 will then put $2.75 into focus for shares of ACLS.

Traders can look to buy ACLS off any weakness to anticipate that breakout and then simply use a stop that sits just below some near-term support levels at $1.23 to its 50-day at $1.19 a share. One could also buy ACLS off strength once it takes out those breakout levels with volume and then simply use a stop that sits right around $1.40 to $1.30 a share.

Gevo

One final under-$10 name that’s trending very close to triggering a near-term breakout trade is Gevo (GEVO), a renewable chemicals and advanced biofuels company. This stock has been hammered by the bears during the last six months, with shares off by 52%.

If you take a look at the chart for Gevo, you’ll see that this stock has been uptrending strong for the last two months, with shares soaring from its low of $1.36 to its recent high of $2.43 a share. During that uptrend, shares of GEVO have been mostly making higher lows and higher highs, which is bullish technical price action. That move has pushed shares of GEVO back above its 50-day moving average of $1.69 a share and the upside volume flows of late have been tracking bullish. This stock is now quickly moving within range of triggering a near-term breakout trade.

Traders should now look for long-biased trades in GEVO if it manages to break out above some near-term overhead resistance levels at $2.25 to $2.43 a share and then once it clears its gap down day high from last September at $2.61 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 651,015 shares. If that breakout triggers soon, then GEVO will set up to re-fill some of its previous gap down zone that started close to $3.50 a share. Any move above $3.50 would then put $3.79 to its 200-day at $4.05 into range for shares of GEVO.

Traders can look to buy GEVO off any weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support at $1.82 share. One could also buy GEVO off strength once it clears those breakout levels with volume and then simply use a stop that sits just below $2.20 a share. I would add to either position once GEVO takes out its gap down day high of $2.61 a share with volume.

This is a heavily shorted stock, since the current short interest as a percentage of its float is a whopping 29.5%. If shares of GEVO trigger that breakout soon, then look for a monster short-covering rally to develop that could send this stock screaming higher in the near-term.

To see more hot under-$10 equities, check out the Stocks Under $10 Setting Up to Explode portfolio on Stockpickr.

-- Written by Roberto Pedone in Winderemere, Fla.

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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 technical analysis for small- and large-cap stocks, options, futures, commodities and currencies. Roberto studied international business at the Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany. His work has appeared on financial outlets including CNBC.com and Forbes.com. You can follow Pedone on Twitter at www.twitter.com/zerosum24 or @zerosum24.