Stock Quotes in this Article: JASO, OREX, TEAR, VVTV, SKUL

 MADISON, Wis. (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 Multiband (MBND), which skyrocketed higher by 24%; Transcat (TRNS), which jumped higher by 16.4%; Central European Media Enterprises (CETV), which surged higher by 16.2%; and MannKind (MNKD), which boomed to the upside by 16.2%. 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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One low-priced stock that recently broke out and exploded higher was solar energy player JA Solar (JASO), which I highlighted in April 11's "5 Stocks Under $10 Set to Soar Higher" at $4.50 a share. I mentioned in that piece that JASO had recently come out of a nasty downtrend and the stock was starting to spike higher with heavy upside volume. That move was quickly pushing shares of JASO within range of triggering a near-term breakout trade above some overhead resistance levels at $4.66 to $4.89 a share.

Guess what happened? Shares of JASO didn't take long to move above those resistance levels following my article. The stock briefly pulled back to a low of $3.87 a share on April 15, and then it took off and cleared those key resistance levels at the end of the month. Shares of JASO then experienced a super spike higher last week with the stock hitting a new 52-week high at $11.40 a share on heavy upside volume. That represents a monster gain of over 100% in very short timeframe for anyone who played the breakout. Keep in mind that JASO never violated either its 50-day or 200-day moving averages after it cleared both at the end of April. That helped guide investors to stay with the trade after it originally broke out.

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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.

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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ValueVision Media

One under-$10 stock that's starting to move within range of triggering a major breakout trade is ValueVision Media (VVTV), a multichannel electronic retailer that markets, sells and distributes products to consumers through TV, telephone, online, mobile and social media. This stock is off to a booming start in 2013, with shares up a whopping 135%.

If you take a look at the chart for ValueVision Media, you'll notice that this stock has been uptrending strong for the last five months, with shares soaring higher from its low of $1.62 to its recent high of $4.47 a share. During that uptrend, shares of VVTV have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of VVTV within range of triggering a major breakout trade.

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Traders should now look for long-biased trades in VVTV if it manages to break out above some near-term overhead resistance levels at $4.25 to its 52-week high of $4.47 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 275,752 shares. If that breakout triggers soon, then VVTV will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are its next significant overhead resistance levels at $6 to $8 a share.

Traders can look to buy VVTV off weakness to anticipate that breakout and simply use a stop that sits just below some near-term support at $3.66 a share. One can also buy VVTV off strength once it takes out those breakout levels with volume and then simply use a stop that sits just below its 50-day moving average at $3.84 a share or below $3.66 a share. The $3.20 level is also another major support area to key off if VVTV pulls back.

TearLab

Another under-$10 stock that's starting to push into range of triggering a major breakout trade is TearLab (TEAR), which commercializes a proprietary tear-testing platform that enables eye care practitioners to test for highly sensitive and specific biomarkers using nanoliters of tear film. This stock has been crazy hot so far in 2013, with shares up 143%.

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If you take a look at the chart for TearLab, you'll see that this stock has been in a beautiful uptrend for the last five months, with shares soaring higher from its low of $3.71 to its recent high of $10.25 a share. During that uptrend, shares of TEAR have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of TEAR within range of triggering a major breakout trade.

Market players should now look for long-biased trades in TEAR if it manages to break out above its 52-week high at $10.25 a share with high volume. Look for a sustained move or close above that level with volume that registers near or above its three-month average action of 367,590 shares. If that breakout triggers soon, then TEAR will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $12 to $15 a share.

Traders can look to buy TEAR off weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support levels at $9.41 or at $8.50 a share. One can also buy TEAR off strength once it clears $10.25 a share with volume and then simply use a stop right below $9.41 a share.

This stock is a favorite target of the bears, since the current short interest as a percentage of the float for TEAR is extremely high at 23.8%. If that breakout triggers soon, then we could easily see a large short-squeeze develop for TEAR, so make sure to put this name on your breakout trading radar.

Skullcandy

One under-$10 name that's starting to move within range of triggering a near-term breakout trade is Skullcandy (SKUL), an audio brand that reflects the collision of the music, fashion and action sports lifestyles. This stock has been hit hard by the sellers in 2013, with shares off by 25%.

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If you take a look at the chart for Skullcandy, you'll notice that for most of 2013 this stock has been downtrending badly from over $8 to its recent low of $4.80 a share. During that downtrend, shares of SKUL were consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of SKUL have started to come out of that downtrend and potentially reverse to a bullish uptrend, since the stock has rebounded off its recent low of $4.80 to $6.10 a share. That move has pushed SKUL back above its 50-day moving average at $5.32 a share, and it's now quickly pushing the stock within range of triggering a near-term breakout trade.

Traders should now look for long-biased trades in SKUL if it manages to break out above some near-term overhead resistance at $6.10 a share with high volume. Look for a sustained move or close above that level with volume that hits near or above its three-month average action of 672,352 shares. If that breakout triggers soon, then SKUL will set up to re-fill some of its recent gap down zone from March that started at $6.97 a share. Any high-volume move above $6.97 to $7.10 a share will then put $7.40 to $8 into range for shares of SKUL.

Traders can look to buy SKUL off weakness to anticipate that breakout and simply use a stop that sits right below its 50-day at $5.32 a share or below $5.17 a share. One can also buy SKUL off strength once it clears $6.10 a share with volume and then simply use a stop that sits right below $5.50 a share, or below $5.32 a share.

This stock is a favorite target of the short-sellers, since the current short interest as a percentage of the float for SKUL is very high at 18.5%. This stock has a solid potential for a large short-squeeze if that breakout triggers soon, so make sure to keep an eye on this equity.

Orexigen Therapeutics

Another under-$10 name that's trending within range of triggering a near-term breakout trade is Orexigen Therapeutics (OREX), which is focused on the development of pharmaceutical product candidates for the treatment of obesity. This stock is off to a decent start in 2013, with shares up 19.2%.

If you take a look at the chart for Orexigen Therapeutics, you'll notice that this stock has been uptrending notably for the last two months, with shares moving higher from its low of $5.45 to its recent high of $6.64 a share. During that uptrend, shares of OREX have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of OREX within range of triggering a breakout trade above a key descending trendline.

Market players should now look for long-biased trades in OREX if it manages to break out above some near-term overhead resistance levels at $6.47 to $6.64 a share and then once it clears more resistance at $6.68 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 1.11 million shares. If that breakout triggers soon, then OREX will set up to re-test or possibly take out its 52-week high at $7.73 a share. Any high-volume move above $7.73 will then put its next major overhead resistance levels at $9 to $10 into range for shares of OREX.

Traders can look to buy OREX off weakness to anticipate that breakout and simply use a stop that sits right below its 50-day at $6.03 a share or around some more key support levels at $5.88 to $5.64 a share. One can also buy OREX off strength once it clears those breakout levels with volume and then simply use a stop that sits just below its 50-day at $6.03 a share. I would add to either position if OREX clears $7.73 a share with heavy upside volume.

This is another stock that's popular among the short-sellers, since the current short interest as a percentage of the float for OREX is pretty high at 10.2%. If OREX triggers that breakout soon, then this stock could easily rip significantly higher, so make sure to put it on your breakout trading radar.

Ballard Power Systems

One more under-$10 name that looks ready to trigger a near-term breakout trade is Ballard Power Systems (BLDP), which is engaged in the design, development, manufacture, sale and service of fuel cell products for a variety of applications, focusing on motive power and stationary power. This stock is off to a monster start in 2013, with shares up a whopping 96%.

If you take a look at the chart for Ballard Power Systems, you'll notice that that this stock has been uptrending strong for the last month and change, with shares soaring higher from its low of 76 cents per share to its recent high of $1.28 a share. During that uptrend, shares of BLDP have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of BLDP within range of triggering a near-term breakout trade.

Traders should now look for long-biased trades in BLDP if it manages to break out above some near-term overhead resistance levels at $1.28 to $1.44 a share and then once it clears its 52-week high at $1.54 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 770,411 shares. If that breakout hits soon, then BLDP will set up to enter new 52-week-high territory above $1.54, which is bullish technical price action. Some possible upside targets off that breakout are $1.75 to $2.20 a share, or even $2.50 a share.

Traders can look to buy BLDP off weakness to anticipate that breakout and simply use a stop that sits just below its 50-day at $1.03 a share. One can also buy off strength once BLDP clears those breakout levels with volume and then simply use a stop that sits a comfortable percentage point from your entry. I would add to either position once BLDP clears $1.54 and then $1.75 a share with heavy upside volume.

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 Madison, Wis.

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

Roberto Pedone, based out of Madison, Wis., 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.