Stock Quotes in this Article: BWEN, OCZ, STKL, LEDS, RENN

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 Celsion (CLSN), which skyrocketed higher by 39.4%; Revolution Lighting Technologies (RVLT), which soared higher by 25%; TranSwitch (TXCC), which surged higher by 12.5%; and Sonus Networks (SONS), which ripped higher by 12.4%. 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 Sell Now

One low-priced stock that recently broke out and exploded higher was biopharmaceutical player Ziopharm Oncology (ZIOP), which I highlighted in May 16's "5 Stocks Under $10 Set to Soar" at $1.70 a share. I mentioned in that piece that shares of ZIOP had recently gapped down sharply from over $5 to $1.66 a share with heavy downside volume. Following that move, shares of ZIOP entered a consolidation pattern with the stock trending sideways between $1.49 on the downside and $1.89 on the upside. Shares of ZIOP were quickly moving within range of triggering a major breakout trade above the upper-end of its recent sideways chart pattern.

Guess what happened? Shares of ZIOP didn't wait long to trigger that breakout with the stock ripping higher on May 23 with above-average volume. Then on May 24 shares of ZIOP exploded to the upside with monster volume and hit an intraday high of $2.96 a share. That represents a gain of over 70% from where I flagged the stock for its breakout potential. This breakout had all the ingredients a trader should be looking for – strong price action through resistance levels with heavy upside volume. Anyone who took this trade banked ridiculous coin in a very short timeframe.

>>5 Trading Setups With Upside This Week

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.

>>5 Stocks Poised to Pop on Bullish Earnings

SemiLEDS

One under-$10 stock that's quickly moving within range of triggering a near-term breakout trade is SemiLEDS (LEDS), which develops, manufactures and sells light emitting diode chips and LED components. This stock is off to a booming start in 2013, with shares up a whopping 104%.

If you take a look at the chart for SemiLEDS, you'll notice that this stock has been riding above its 50-day moving average for the last three months. Each time the stock has pulled back to that key technical level it has found buying interest. Shares of LEDS are now starting to break out above some near-term overhead resistance at $1.60 a share today with strong upside volume. That move is quickly pushing the stock within range of triggering another near-term breakout trade.

>>3 Tech Stocks Under $10 to Watch

Traders should now look for long-biased trades in LEDS if it manages to break out above some near-term overhead resistance levels at $1.80 to $1.94 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 735,159 shares. If that breakout triggers soon, then LEDS will set up to re-test or possibly take out its next major overhead resistance levels at $2.44 to $3.20 a share. Any high-volume move above $3.20 will then put $4 into range for shares of LEDS.

Traders can look to buy LEDS off weakness to anticipate that breakout and simply use a stop that sits just below its 50-day at $1.41 or its 200-day at $1.30 a share. One can also buy LEDS off strength once it takes out those breakout levels with volume and then simply use a stop that sits just below $1.60 a share or near its 50-day at $1.41 a share.

Broadwind Energy

Another under-$10 stock that's starting to trend into range of triggering a near-term breakout trade is Broadwind Energy (BWEN), which is an independent, horizontally integrated supplier of customized products and services to the U.S. wind industry. This stock has been on fire so far in 2013, with shares up 125%.

>>5 Stocks Insiders Love Right Now

If you take a look at the chart for Broadwind Energy, you'll see that this stock is just starting to bounce strongly right off its 50-day moving average at $4.44 a share. That bounce is also holding a pattern of higher lows for BWEN that's been in place over the last month. Shares of BWEN are now quickly moving within range of triggering a near-term breakout trade.

Market players should now look for long-biased trades in BWEN if it manages to break out above some near-term overhead resistance levels at $5.05 to $5.53 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 112,837 shares. If that breakout triggers soon, then BWEN will set up to re-test or possibly take out its 52-week high at $6 a share. Any high-volume move above $6 will then put $7.50 to $8.50 into range for shares of BWEN.
Traders can look to buy BWEN off weakness to anticipate that breakout and simply use a stop that sits right below its 50-day at $4.44 a share or below more support at $4.33 a share. One can also buy BWEN off strength once it clears those breakout levels with volume and then simply use a stop right below its 50-day at $4.44 a share.

OCZ Technology

One under-$10 name that's starting to move within range of triggering a major breakout trade is OCZ Technology (OCZ), which provides solid state drives and memory modules for computing devices and systems. This stock has been in control of the seller in 2013, with shares off sharply by 25%.

>>5 Rocket Stocks to Buy as Stocks Bounce

If you take a look at the chart for OCZ Technology, you'll notice that this stock has started to uptrend over the last few weeks, after shares marked a double bottom test at $1.20 to $1.16 a share. During that uptrend, shares of OCZ have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of OCZ within range of triggering a major breakout trade.

Traders should now look for long-biased trades in OCZ if it manages to break out above some near-term overhead resistance levels at its 50-day moving average of $1.47 a share and then once it clears more key resistance at $1.58 to $1.60 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 1.30 million shares. If that breakout triggers soon, then OCZ will set up to re-test or possibly take out its next major overhead resistance levels at $2 to its 200-day at $2.28 a share. Any high-volume move above $2.28 will then put $2.77 into range for shares of OCZ.

Traders can look to buy OCZ off weakness to anticipate that breakout and simply use a stop that sits right below some near-term support levels at $1.30 to $1.25 a share. One can also buy OCZ off strength once it clears those breakout levels with volume and then simply use a stop that sits right below $1.40 a share.

This stock is a favorite target of the short-sellers, since the current short interest as a percentage of the float for OCZ is extremely large at 21.7%. Shares of OCZ could easily see a monster short-squeeze if that breakout triggers soon, so make sure to have this name on your trading radar.

SunOpta

Another under-$10 name that's trending within range of triggering a major breakout trade is SunOpta (STKL), which is globally engaged in the sourcing, processing and packaging of natural, organic and specialty food products. This stock is off to a hot start in 2013, with shares up sharply by 33%.

If you take a look at the chart for SunOpta, you'll notice that this stock recently crossed back above its 50-day moving average at $7.27 a share with above-average volume. Shares of STKL have been uptrending since taking back its 50-day, with the stock making mostly higher lows and higher highs, which is bullish technical price action. That move is quickly pushing STKL within range of triggering a major breakout trade.

Market players should now look for long-biased trades in STKL if it manages to break out above some near-term overhead resistance levels at $7.62 to $7.69 a share and then once it takes out its 52-week high at $7.74 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 198,289 shares. If that breakout triggers soon, then STKL will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $8.50 to $9 a share, or even $10 a share.

Traders can look to buy STKL off weakness to anticipate that breakout and simply use a stop that sits right below its 50-day at $7.28 a share, or below some more near-term support at $6.95 a share. One can also buy STKL off strength once it clears those breakout levels with volume and then simply use a stop that sits just below its 50-day at $7.28 a share.

Renren

One more under-$10 stock that looks ready to trigger a near-term breakout trade is Renren (RENN), which is engaged is engaged in the operation of social networking internet platform, as well as provision of online advertising services and internet value-added services, including online gaming operations, online talent show and other IVAS, among others. This stock is off to a slow start in 2013, with shares off by 8%.

If you take a look at the chart for Renren, you'll notice that this stock been uptrending strong for the last month and change, with shares moving higher from its low of $2.52 a share to its recent high of $3.25 a share. During that uptrend, shares of RENN have been mostly making higher lows and higher highs, which is bullish technical price action. That move has now started to push RENN into breakout territory, since the stock has taken out some near-term overhead resistance today at $3.14 a share with strong volume. Shares of RENN are now quickly moving within range of triggering another major breakout trade.

Traders should now look for long-biased trades in RENN if it manages to break out above some near-term overhead resistance levels at $3.25 a share to its 200-day at $3.34 a share and then once it clears more resistance at $3.41 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 2.79 million shares. If that breakout hits soon, then RENN will set up to re-test or possibly take out its next major overhead resistance levels at $4 to $4.33 a share. Any high-volume move above $4.33 will then put $5 into range for shares of RENN.

Traders can look to buy RENN off weakness to anticipate that breakout and simply use a stop that sits just below its 200-day at $2.88 a share. One can also buy off strength once RENN clears those breakout levels with volume and then simply use a stop that sits just below $3.14 a share or below $3 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 Madison, Wis.

RELATED LINKS:

>>3 Homebuilders Ready to Fall Down
>>5 Defensive Stocks to Protect Your Portfolio Gains

>>5 Dividend Stocks Getting Ready to Hike Payouts

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 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.