Stock Quotes in this Article: ALXA, CREG, SCMP, HSOL, DCIX

 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.

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Just take a look at some of the hot movers in the under-$10 complex from Thursday, including KiOR (KIOR), which is skyrocketing higher by 57%; NewLead (NEWL), which is soaring by 40%; FreeSeas (FREE), which is ripping higher by 30%; and Perma-Fix Environmental Services (PESI), which is spiking higher by 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 skyrocketed higher was biopharmaceutical player Oncothyreon (ONTY), which I highlighted in Sept. 19's "5 Stocks Under $10 Set to Soar" at $1.85 per share. I mentioned in that piece that shares of ONTY were starting to find some buying interest right above its 50-day moving average of $1.73 a share. That buying interest was starting to push shares of ONTY within range of triggering a big breakout trade above some near-term overhead resistance levels at $1.93 to $1.98 a share.

Guess what happened? Shares of ONTY gapped up sharply on Wednesday with monster upside volume. That move took the stock above all of those resistance levels and shares of ONTY tagged an intraday high of $2.43 a share. That represents a quick gain of just over 30% for anyone who anticipated that breakout and bought the stock ahead of Wednesday's action.

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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.

Hanwha SolarOne

One under-$10 stock that's starting to move within range of triggering a big breakout trade is Hanwha SolarOne (HSOL), which manufactures a number of silicon ingots, PV cells and PV modules using advanced manufacturing process technologies. This stock has been on fire so far in 2013, with shares up 301%.

If you take a look at the chart for Hanwha SolarOne, you'll notice that this stock has been uptrending strong for the last month and change, with shares moving higher from its low of $2.60 to its recent high of $4.28 a share. During that uptrend, shares of HSOL have been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of HSOL within range of triggering a big breakout trade.

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Traders should now look for long-biased trades in HSOL if it manages to break out above its 52-week high at $4.28 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 1.61 million shares. If that breakout triggers soon, then HSOL 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 $6 to $7 a share.

Traders can look to buy HSOL off any weakness to anticipate that breakout and simply use a stop that sits right below its 50-day moving average at $3.40 a share, or near more support at $3.35 a share. One can also buy HSOL off strength once it clears $4.28 a share with volume and then simply use a stop that sits a comfortable percentage from your entry point.

China Recycling Energy

Another stock that's starting to move within range of triggering a near-term breakout trade is China Recycling Energy (CREG), which engages in the recycling energy business, providing energy savings and recycling products and services. This stock is off to a strong start in 2013, with shares up a whopping 166%.

If you take a look at the chart for China Recycling Energy, you'll notice that this stock recently formed a double bottom chart pattern at $1.67 to $1.66 a share. Following that bottom, shares of CREG have started to uptrend strong and move back above its 50-day moving average. That uptrend has now pushed shares of CREG within range of triggering a near-term breakout trade.

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Market players should now look for long-biased trades in CREG if it manages to break out above some near-term overhead resistance levels at $2.80 to $2.85 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 95,671 shares. If that breakout triggers soon, then CREG will set up to re-test or possibly take out its next major overhead resistance levels at $3.50 to $4 a share.

Traders can look to buy CREG off any weakness to anticipate that breakout and simply use a stop that sits right below its 50-day moving average of $2.32 a share, or near more support at $2 a share. One can also buy CREG 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.

Sucampo Pharmaceuticals

Another under-$10 stock that's starting to trend within range of triggering a major breakout trade is Sucampo Pharmaceuticals (SCMP), which is engaged in the discovery, development and commercialization of proprietary drugs based on prostones, and other novel drug technologies. This stock is off to a decent start in 2013, with shares up by 26%.

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If you take a look at the chart for Sucampo Pharmaceuticals, you'll notice that this stock has been downtrending badly for the last four months, with shares dumping hard from its high of $10.48 to its recent low of $5.40 a share. During that downtrend, shares of SCMP have been consistently making lower highs and lower lows, which is bearish technical price action. That said, the downside volatility for SCMP looks to be over in the short-term since the stock has started to reverse its downtrend and enter an uptrend. That reverse is quickly pushing shares of SCMP within range of triggering a major breakout trade above a key downtrend line.

Traders should now look for long-biased trades in SCMP if it manages to break out above some near-term overhead resistance levels at $6.33 to $6.66 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 115,383 shares. If that breakout triggers soon, then SCMP will set up to re-test or possibly take out its next major overhead resistance levels at $7.09 to $7.67 a share. Any high-volume move above those levels will then give SCMP a chance to tag $8 to $9 a share.

Traders can look to buy SCMP off weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support levels at $5.58 to $5.40 a share. One can also buy SCMP 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.

Alexza Pharmaceuticals

Another under-$10 stock that's starting to move within range of triggering a big breakout trade is Alexza Pharmaceuticals (ALXA), which is focused on the research, development and commercialization of novel proprietary products for the acute treatment of central nervous system conditions. This stock hasn't done much so far in 2013, with shares up by just 5.6%.

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If you take a look at the chart for Alexza Pharmaceuticals, you'll notice that this stock has been uptrending strong for the last month, with shares moving higher from its low of $4.23 to its recent high of $5.52 a share. Following that uptrend, shares of ALXA have now started to trend sideways and consolidate between $4.95 on the downside and $5.52 on the upside. Shares of ALXA are now starting to spike 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 ALXA if it manages to break out above some near-term overhead resistance levels at $5.40 to $5.52 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 256,570 shares. If that breakout triggers soon, then ALXA will set up to re-test or possibly take out its 52-week high at $6.65 a share, or its next major overhead resistance level at $7.60 a share.

Traders can look to buy ALXA off weakness to anticipate that breakout and simply use a stop that sits right below its 50-day moving average at $4.77 a share, or near its 200-day moving average at $4.63 a share. One can also buy ALXA 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.

Diana Containerships

One final under-$10 shipping player that looks ready to trigger a big breakout trade is Diana Containerships (DCIX), which is involved in the seaborne transportation activities. This stock has been hit hard by the sellers so for in 2013, with shares off by 35%.

If you take a look at the chart for Diana Containerships, you'll notice that this stock recently formed a double bottom chart pattern at $3.57 to $3.61 a share. Following that bottom, shares of DCIX have started to uptrend and move back above its 50-day moving average at $3.91 a share. That move is quickly pushing shares of DCIX within range of triggering a big breakout trade above some key overhead resistance levels.

Traders should now look for long-biased trades in DCIX if it manages to break out above some near-term overhead resistance levels at $4 to $4.09 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 338,266 shares. If that breakout triggers soon, then DCIX will set up to re-test or possibly take out its next major overhead resistance levels at $4.61 to $4.82 a share. Any high-volume move above those levels will then put its next major overhead resistance levels at $5 to $5.62 into range for shares of DCIX.

Traders can look to buy DCIX off weakness to anticipate that breakout and simply use a stop that sits right below some near-term support levels at $3.61 to $3.57 a share, or even $3.53 a share. One can also buy DCIX 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.

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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.