Stock Quotes in this Article: CSE, MDXG, OSUR, ROSG, ATOS

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 Kandi Technologies Group (KNDI), which skyrocketed higher by 35.9%, and Harvest Natural Resources (HNR), which soared higher by 17%. 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 renewable energy player Ballard Power Systems (BLDP), which I highlighted in May 23's "5 Stocks Under $10 Set to Soar" at $1.20 a share. I mentioned in that piece that shares of BLDP were uptrending strong for the last month or so, with shares consistently making higher lows and higher highs, which is bullish price action. That move was quickly pushing shares of BLDP within range of triggering a near-term breakout trade, which was set to hit if BLDP cleared some key overhead resistance levels at $1.28 to $1.44 and then once it took out its 52-week high at $1.54 a share.

Guess what happened? Shares of BLDP didn't wait long to start triggering that breakout with the stock spiking sharply higher on May 24 with above-average volume. Shares of BLDP continued to skyrocket higher the next two trading sessions with heavy upside volume. The stock exploded higher and hit a new 52-week high on May 29 at $2.39 a share. That represents a gain of close to 100% in just a few trading sessions from the time I flagged the setup. This trade had all the dynamics a breakout trader should look for: uptrending price behavior, a break above key resistance levels and heavy upside volume once the breakout triggered.

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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.

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With that in mind, here's a look at several under-$10 stocks that look poised to potentially trade higher from current levels.

Rosetta Genomics

One under-$10 stock that's quickly moving within range of triggering a near-term breakout trade is Rosetta Genomics (ROSG), which develops diagnostic tests and therapeutic tools. This stock is off to a slow start in 2013, with shares down by 17%.

If you take a look at the chart for Rosetta Genomics, you'll notice that this stock recently spiked sharply higher back above its 50-day moving average at $3.72 a share with heavy upside volume. That move is quickly pushing shares of ROSG within range of triggering a near-term breakout trade.

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Traders should now look for long-biased trades in ROSG if it manages to break out above some near-term overhead resistance at $4.22 a share and then once it takes its 200-day moving average at $4.64 a share to $4.70 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 286,655 shares. If that breakout triggers soon, then ROSG will set up to re-test or possibly take out its next major overhead resistance levels at $5.25 to $5.50 a share. Any high-volume move above those levels will then put its nest major overhead resistance levels at $6 to $7.70 into range for shares of ROSG.

Traders can look to buy ROSG off weakness to anticipate that breakout and simply use a stop that sits just below its 50-day at $3.72 a share or below some more near-term support at $3.62 a share One can also buy ROSG off strength once it takes out those breakout levels with volume and then simply use a stop that sits a comfortable percentage below your entry point.

This stock is a favorite target of the short-sellers, since the current short interest as a percentage of the float for ROSG is very high at $16.8%. When you combine that with its low float of just 9 million shares, you've all the ingredients for a powerful short-squeeze if ROSG triggers that breakout soon.

OraSure Technologies

Another under-$10 stock that's trending within range of triggering a near-term breakout trade is OraSure Technologies (OSUR), which develops, manufactures, markets and sells oral fluid diagnostic products and specimen collection devices using its proprietary oral fluid technologies. This stock has been hammered by the bears in 2013, with shares off sharply by 40%.

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If you take a look at the chart for OraSure Technologies, you'll see that this stock has been downtrending badly for the last six months, with shares crashing lower from its high of $7.50 to its 52-week low of $4.24 a share. During that downtrend, shares of OSUR have been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of OSUR have started to form a potential bottoming pattern, since the stock has found buyers below $4.30 a share for the past month. That action has OSUR trending within range of triggering a near-term breakout trade.

Market players should now look for long-biased trades in OSUR if it manages to break out above some near-term overhead resistance levels at $4.62 to $4.63 a share and then once it clears more resistance at $5.05 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 406,291 shares. If that breakout triggers soon, then OSUR will set up to re-test or possibly take out its next major overhead resistance levels at $5.50 to $6. Any high-volume move above $6 to $6.15 will then put its next major overhead resistance levels at $6.75 to $7 into range for shares of OSUR.

Traders can look to buy OSUR off weakness to anticipate that breakout and simply use a stop that sits right below its 52-week low of $4.24 a share. One can also buy OSUR off strength once it clears those breakout levels with volume and then simply use a stop that sits a comfortable percentage point from your entry point.

MiMedx Group

Another under-$10 stock that's quickly moving within range of triggering a major breakout trade is MiMedx Group (MDXG), an integrated developer, manufacturer and marketer of patent protected regenerative biomaterial products and allografts processed from human amniotic membrane. This stock has been on fire so far in 2013, with shares up a whopping 88%.

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If you take a look at the chart for MiMedx Group, you'll notice that this stock has been trending sideways for the last month, with shares moving between $6 on the downside and $7.50 on the upside. Shares of MDXG are now starting to spike higher today with heavy upside volume as it challenges some near-term overhead resistance levels. If those levels get taken out soon, then this stock could trigger a major breakout trade.

Traders should now look for long-biased trades in MDXG if it manages to break out above some near-term overhead resistance levels at $7.27 to $7.35 a share and then once it clears its 52-week high at $7.50 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 651,805 shares. If that breakout triggers soon, then MDXG will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $9 to $10 a share.

Traders can look to buy MDXG off weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support at $6.81 a share, or below its 50-day at $6.17 a share. One can also buy MDXG off strength once it clears those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

CapitalSource

Another under-$10 name that's trending within range of triggering a major breakout trade is CapitalSource (CSE), a commercial lender that provides financial products to small and middle market businesses nationwide and provides depository products and services to consumers. This stock is off to a strong start in 2013, with shares up 23%.

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If you take a look at the chart for CapitalSource, you'll notice that this stock is just starting to spike back above its 50-day moving average at $9.28 a share. Shares of CSE have been trending sideways inside of a consolidation pattern for the last month, with shares moving between $9.12 on the downside and $9.64 on the upside. A high-volume move above the upper-end of its recent range could trigger a major breakout trade for shares of CSE.

Market players should now look for long-biased trades in CSE if it manages to break out above some near-term overhead resistance levels at $9.52 to $9.64 a share and then once it takes out its 52-week high at $9.86 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 1.96 million shares. If that breakout triggers soon, then CSE 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 major overhead resistance levels at $14 to $16 a share.

Traders can look to buy CSE off weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support at $9.12 a share. One can also buy CSE off strength once it clears those breakout levels with volume and then simply use a stop that sits a comfortable percentage point from your entry point.

Atossa Genetics

One more under-$10 name that looks ready to trigger a major breakout trade is Atossa Genetics (ATOS), a health care company focused on the commercialization of cellular and molecular diagnostic risk assessment products and related services for the detection of pre-cancerous conditions that could lead to breast cancer. This stock has been crushed by the sellers during the last three months, with shares off by 22%.

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If you take a look at the chart for Atossa Genetics, you'll notice that this stock has been downtrending badly for the last two months and change, with shares dropping sharply from its 52-week high $12.40 to its recent low of $4.11 a share. During that downtrend, shares of ATOS have been mostly making lower highs and lower lows, which is bearish technical price action. That said, shares of ATOS have started to rebound sharply off that $4.11 low and off oversold conditions, since its relative strength index just touched 30. That rebound is quickly pushing shares of ATOS within range of triggering a major breakout trade.

Traders should now look for long-biased trades in ATOS if it manages to break out above some near-term overhead resistance levels at $5.50 to $6.23 a share and then once it clears its 50-day moving average at $6.77 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 158,092 shares. If that breakout hits soon, then ATOS will set up to re-test or possibly take out its next major overhead resistance levels $7.50 to $9.50 a share.

Traders can look to buy ATOS off weakness to anticipate that breakout and simply use a stop that sits just below $4.50 or below its 52-week low of $4.11 a share. One can also buy ATOS off strength once it clears those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

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.