Stock Quotes in this Article: CYTR, JAKK, ONTY, VELT, MY

DELAFIELD, 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.

>>5 Big Trades to Take as the Fed Hits the Gas

Just take a look at some of the hot movers in the under-$10 complex from Thursday, including Prospect Global Resources (PGRX), which has skyrocketed by over 30%; Eagle Bulk Shipping (EGLE), which has soared higher by 20%; GigOptix (GIG), which is ripping higher by 18%; and Kandi Technologies (KNDI), which is up by over 15%. You don't even have to catch the entire move in lower-priced stocks such as these to make outsized returns when trading.

One low-priced stock that recently exploded to the upside was development-stage healthcare player Atossa Genetics (ATOS), which I highlighted in Aug. 6's "5 Stocks Setting Up to Break Out" at around $4.90 per share. I mentioned in that piece that shares of ATOS were starting to uptrend over the last month, with shares moving higher form its low of $4.22 to its recent high of $5.08 a share. That move was quickly pushing ATOS within range of triggering a big breakout trade above a key downtrend line that dated back to May. That breakout was set to trigger if ATOS managed to clear $5.08 a share with high volume.

>>5 Stocks Rising on Unusual Volume

Guess what happened? Shares of ATOS started to flirt with that breakout in mid-September when the stock hit $5.20 a share. Shares of ATOS then pulled back right to its 50-day moving average, but the stock never broke its near-term uptrend since it was continuing to make higher lows. Then this stock exploded to the upside on Wednesday with monster volume, after ATOS gapped up sharply clearing that key downtrend line. Shares of ATOS hit an intraday day high of $7.75 a share, which represents a massive gain of close to 60% from that $4.90 level.

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.

>>Beat the S&P With These 5 Shareholder Yield Champs

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.

Oncothyreon

One under-$10 biopharmaceutical player that's starting to move within range of triggering a big breakout trade is Oncothyreon (ONTY), which develops and markets synthetic vaccines and small molecules that treat cancer patients. This stock hasn't done much so far in 2013, with shares down modestly by 3.9%.

If you take a look at the chart for Oncothyreon, you'll notice that this stock has been trending sideways inside of a consolidation chart pattern for the last month and change, with shares moving between $1.63 on the downside and $1.95 on the upside. Shares of ONTY have been finding some buying interest of late right above its 50-day moving average of $1.73 a share. This stock is now starting to push within range of triggering a big breakout trade above the upper-end of its recent sideways trading chart pattern.

>>4 Biotech Stocks Triggering Breakout Trades

Traders should now look for long-biased trades in ONTY if it manages to break out above some near-term overhead resistance levels at $1.93 to $1.95 a share and then once it takes out more resistance at $1.98 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 689,364 shares. If that breakout triggers soon, then ONTY will set up to re-test or possibly take out its next major overhead resistance levels at its 200-day moving average of $2.12 a share to $2.70 a share.

Traders can look to buy ONTY off any weakness to anticipate that breakout and simply use a stop that sits right below its 50-day at $1.73 a share or around more support at $1.63 a share. One can also buy ONTY off strength once it takes out those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

CytRx

Another under-$10 biotechnology player that's starting to trend within range of triggering a major breakout trade is CytRx (CYTR), which has an oncology pipeline that includes two programs in clinical development for cancer indications: aldoxorubicin and tamibarotene. This stock has been moving to the upside during the last three months, with shares up by 21%.

>>4 Biotech Stocks under $10 to Watch

If you take a look at the chart for CytRx, you'll notice that this stock has been trending sideways inside of a consolidation chart pattern for the last two months, with shares moving between $2.27 on the downside and $2.68 on the upside. That consolidation pattern has occurred right above this stock's 50-day and 200-day moving averages. Shares of CYTR have now started to break out above some near-term overhead resistance at $2.49 a share. That move is quickly pushing CYTR within range of triggering an even bigger breakout trade above the upper-end of its recent sideways trading chart pattern.

Market players should now look for long-biased trades in CYTR if it manages to break out above some near-term overhead resistance levels at $2.68 to $2.80 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 154,838 shares. If that breakout triggers soon, then CYTR will set up to re-test or possibly take out its next major overhead resistance levels at $3.20 to $4 a share.

Traders can look to buy CYTR off any weakness to anticipate that breakout and simply use a stop that sits right below its 200-day at $2.33 a share or below more support at $2.27 a share. One can also buy CYTR 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.

Jakks Pacific

One under-$10 toy player that's trending very close to triggering a major breakout trade is Jakks Pacific (JAKK), which is a producer and marketer of children's toys and other consumer products. This stock has been destroyed by the bears so far in 2013, with shares off sharply by 60%.

>>5 Stocks Insiders Love Right Now

If you take a look at the chart for Jakks Pacific, you'll notice that this stock has been downtrending badly for the last two months and change, with shares plunging from its high of $11.75 to its recent low of $4.82 a share. During that downtrend, shares of JAKK have been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of JAKK look like they might be ready to see an end to its downside volatility in the short-term if the recent lows can hold. I believe this due to the fact that JAKK has started to move sideways and trend within range of triggering a major breakout trade.

Traders should now look for long-biased trades in JAKK if it manages to break out above some near-term overhead resistance levels at $5.08 to $5.27 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 695,817 shares. If that breakout triggers soon, then JAKK will set up to re-test or possibly take out its next major overhead resistance levels at $5.68 to its 50-day moving average at $6.07 a share. Any high-volume move above its 50-day will then put $7 to $8 into range for shares of JAKK.

Traders can look to buy JAKK off weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support levels at $4.87 to $4.82 a share. One can also buy JAKK 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.

Velti

Another under-$10 name that's quickly moving within range of triggering a big breakout trade is Velti (VELT), which provides mobile marketing and advertising technology solutions that enable brands, advertising agencies, and mobile operators to implement interactive and measurable campaigns by communicating with and engaging consumers via their mobile devices. This stock has been destroyed by the bears so far in 2013, with shares off sharply by 91%.

>>5 Stocks Set to Soar on Bullish Earnings

If you take a look at the chart for Velti, you'll notice that this stock recently gapped down big from over $1 a share to 33 cents per share with monster downside volume. Following that gap down, shares of VELT have started to consolidate and move sideways between 33 cents per share on the downside and 44 cents per share on the upside. Shares of VELT are spiking sharply higher on Thursday above some near-term support at 35 cents per share. That move is pushing this stock within range of triggering a big breakout trade above the upper-end of its recent sideways trading chart pattern.

Market players should now look for long-biased trades in VELT if it manages to break out above some near-term overhead resistance at 44 cents per 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 2.02 million shares. If that breakout triggers soon, then VELT could easily explode higher and potentially re-test its gap down day high from August at 66 cents per share.

Traders can look to buy VELT off weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support levels at 35 cents to 33 cents per share. One can also buy VELT off strength once it clears 44 cents per share with volume and then simply use a stop that sits a comfortable percentage from your entry point.

China Ming Yang Wind Power

One final under-$10 alternative energy player that looks ready to trigger a big breakout trade is China Ming Yang Wind Power (MY), which is focused on designing, manufacturing, selling and servicing megawatt-class wind turbines in China. This stock is off to a hot start in 2013, with shares up b 44%.

>>5 Rocket Stocks to Buy as Mr. Market Climbs

If you take a look at the chart for the China Ming Yang Wind Power, you'll notice that this stock has been uptrending strong for the last two months, with shares moving higher from its low of $1.48 a share to its recent high of $1.92 a share. During that uptrend, shares of MY have been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of MY within range of triggering a major breakout trade above a key downtrend line that dates back to June.

Traders should now look for long-biased trades in MY if it manages to break out above some near-term overhead resistance levels at $1.78 to $1.92 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 volume of 415,852 shares. If that breakout triggers soon, then MY will set up to re-test or possibly take out its 52-week high at $2.26 a share. Any high-volume move above $2.26 will then give this stock a chance to tag its next major overhead resistance levels at $2.80 to $3.14, or even $3.36 a share.

Traders can look to buy MY off weakness to anticipate that breakout and simply use a stop that sits right below its 200-day at $1.53 a share or below more support at $1.48 a share. One can also buy MY 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 Delafield, Wis.

RELATED LINKS:

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 Delafield, 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.