Stock Quotes in this Article: LEI, VRNG, IQNT, ZLCS, MY

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 today, including Online Resources (ORCC), which is exploding higher by 81%; Harte-Hanks (HHS), which is ripping higher 22%; Keryx Biopharmaceuticals (KERX), which is soaring 9.1%; and Oclaro (OCLR), which is up 7.8%. 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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China Ming Yang Wind Power Group

One under-$10 stock that’s just starting to trigger a breakout trade here is China Ming Yang Wind Power Group (MY), a wind turbine manufacturer in China. This stock is blazing a trail to the upside in 2013, with shares up 40%.

If you take a look at the chart for China Ming Yang Wind Power Group, you’ll notice that this stock has been uptrending strong for the last month and change, with shares soaring higher from its low of $1.17 to its recent super spike high of $2.13 a share. During that uptrend, shares of MY have been consistently making higher lows and higher highs, which is bullish technical price action. Shares of MY have now started to bounce off its 200-day moving average at $1.43 a share and it’s starting to break out above some near-term overhead resistance at $1.70 a share with decent volume. Volume today has registered 195,000 shares, which is just a bit below its three-month average action of 200,055 shares.

Traders should now look for long-biased trades in MY as long as it’s trending above $1.70 to $1.75 a share with strong upside volume flows. I would consider any upside volume day that registers near or above its three-month average action of 200,055 shares as bullish. If MY can maintain that trend, then this stock will set up to re-test or possibly take out its next major overhead resistance levels at $2.13 to $2.47 a share.

Vringo

Another under-$10 stock that’s trending within range of triggering a near-term breakout trade is Vringo (VRNG), which provides products for mobile video entertainment and personalization. This stock has jumped higher during the last three months, with shares up 28.5%.

If you take a look at the chart for Vringo, you’ll notice that this stock is just starting to trend back above its 50-day moving average of $3.25 a share, which is technically bullish action. This move is quickly pushing shares of VRNG within range of triggering a near-term breakout trade.

Market players should now look for long-biased trades in VRNG if it manages to break out above some near-term overhead resistance levels at $3.35 a share to its 200-day moving average at $3.52 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 4.6 million shares. If that breakout hits soon, then VRNG will set up to re-test or possibly take out its next major overhead resistance levels at $3.83 to $4.42 a share. Any high-volume move above $4.42 will then put $5 to $5.73 into range for shares of VRNG.

Traders can look to buy VRNG off any weakness to anticipate that breakout and then simply use a stop that sits close to some near-term support at $3.04 a share. One can also buy off strength once VRNG takes out those breakout levels with volume and then simply use a stop that sits just below its 50-day moving average of $3.25 a share. I would add to either position once VRNG takes out $3.83 to $4.42 a share with volume.

Lucas Energy

One under-$10 name that’s trending very close to triggering a major breakout trade is Lucas Energy (LEI), which explores for, develops, produces and markets mainly crude oil and to a much lesser extent, natural gas. This stock has been on fire so far in 2013, with shares up a bit over 16%.

If you take a look at the chart for Lucas Energy, you’ll see that this stock has been uptrending strong for the last month and change, with shares soaring from its low of 95 cents to its recent high of $1.82 a share. During that uptrend, shares of LEI have been mostly making higher lows and higher highs, which is bullish technical price action. That move has now pushed LEI within range of triggering a major breakout trade. The stock is also just starting to move back above its 200-day moving average of $1.66 a share.

Traders should now look for long-biased trades in LEI if it manages to break out above some near-term overhead resistance levels at $1.82 to $1.93 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 184,305 shares. If that breakout triggers soon, then LEI will set up to re-test or possibly take out its next major overhead resistance levels at $2.54 to $3.24 a share.

Traders can look to buy LEI off any weakness to anticipate that breakout and simply use a stop that sits right below its 50-day moving average of $1.50 a share. One could also buy LEI off strength once it clears those breakout levels with volume and then simply use a stop that sits just below its 200-day moving average of $1.66 a share.

Zalicus

Another under-$10 name that’s trading close to triggering a near-term breakout trade is Zalicus (ZLCS), a biopharmaceutical company that discovers and develops novel treatments for patients suffering from pain and immuno-inflammatory diseases. This stock is off to a hot start in 2013, with shares up a whopping 16.5%.

If you take a look at the chart for Zalicus, you’ll notice that this stock has been trending sideways for the last two months and change, with shares moving between 57 cents on the downside and 83 cents on the upside. Shares of ZLCS have just started to bounce off its 50-day moving average of 67 cents and its quickly moving within range of triggering a near-term breakout trade above the upper-end of its recent chart pattern.

Market players should now look for long-biased trades in ZLCS if it manages to break out above some near-term overhead resistance levels at 80 to 83 cents per share and then once it takes out some past overhead resistance levels at 91 cents to $1.10 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 1,141,380 shares. If that breakout triggers soon, then ZLCS will set up to re-fill some of its previous gap down zone above $1.10 a share. That gap started at around $1.40 a share, so any move above 91 cents to $1.10 will put that gap into play for shares of ZLCS.

Traders can look to buy ZLCS off any weakness to anticipate that breakout and then simply use a stop that sits just below its 50-day moving average of 67 cents per share. One could also buy ZLCS off strength once it takes out those breakout levels with volume and then simply use a stop that sits just below 80 cents per share. I would add to either position once ZLCS clears 91 cents to $1.10 a share with volume.

Inteliquent

One final under-$10 name that’s trending very close to triggering a major breakout trade is Inteliquent (IQNT), which is a full-scale network solutions provider, offering intelligent networking to solve challenging interconnection and interoperability issues on a global scale. This is another stock that’s off to a red hot start in 2013, with shares up 16.7%.

If you take a look at the chart for IQNT, you’ll notice that this stock has been uptrending strong for the last two months and change, with shares soaring from its low of $2.10 to its recent high of $3.52 a share. During that uptrend, shares of IQNT have been consistently making higher lows and higher highs, which is bullish technical price action. Just today, shares of IQNT have started to skyrocket right off its 50-day moving average of $2.69 a share with heavy volume. This move is quickly pushing the stock within range of triggering a major breakout trade.

Traders should now look for long-biased trades in IQNT if it manages to break out above some near-term overhead resistance at $3.52 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 894,124 shares. If that breakout triggers soon, then IQNT will set up to re-test or possibly take out its next major overhead resistance levels at $5 to its 200-day moving average at $5.84 a share.

Traders can look to buy IQNT off any weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support at $2.54 to $2.47 a share. One could also buy IQNT off strength once it clears $3.52 a share with volume and then simply use a stop that sits just below $3.25 to $3.20 a share.

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.