Stock Quotes in this Article: BCRX, DCTH, DVAX, EJ, MEET

 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 Real Goods Solar (RSOL), which is skyrocketing higher by 27%; Aastrom Biosciences (ASTM), which is ripping higher by 18%; Kingold Jewelry (KGJI), which is soaring by 17%; and General Steel (GSI), which is trending up by 10%. 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 basic materials player Gulf Resources (GURE), which I highlighted in Sept. 16's "5 Stocks Under $10 Making Big Moves" at $1.80 per share. I mentioned in that piece that shares of GURE were ripping higher right off its 50-day moving average of $1.70 a share with strong upside volume. That move was quickly pushing GURE within range of triggering a major breakout trade if it can manage to take out some near-term overhead resistance levels at $1.90 to its 52-week high at $2.06 a share with high volume.

Guess what happened? Shares of GURE didn't wait long to trigger that move, since the stock opened strong the following day and took out those breakout levels with massive upside volume. Shares of GURE tagged an intraday high on Wednesday of $3.10 a share, which represents a gain of 70% from that $1.80 level. That's a monster gain in just one day for anyone who played the stock once it cleared those key resistance levels with volume. Volume on Wednesday was over 8 million shares, which is well above its three-month average action of 316,577 shares.

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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.

E-House China

One under-$10 name that's quickly pushing within range of triggering a big breakout trade is E-House China (EJ), which is engaged in providing real estate agency and brokerage services in the primary and secondary markets and real estate consulting and information services in the People's Republic of China. This stock is off to a monster start in 2013, with shares up sharply by 131%.

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If you take a look at the chart for E-House China, you'll notice that this stock has been trending sideways and consolidating for the last month and change, with shares moving between $8.35 on the downside and $10.24 on the upside. Shares of EJ are starting to spike sharply higher today right above that $8.35 low, and this stock is now quickly moving within range of triggering a big breakout trade above the upper-end of its recent range.

Traders should now look for long-biased trades in EJ if it manages to break out above some near-term overhead resistance levels at $9.74 to $10.19 a share, and then once it clears its 52-week high at $10.24 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 1.11 million shares. If that breakout triggers soon, then EJ will set up to enter new 52-week-high territory above $10.24, which is bullish technical price action. Some possible upside targets off that breakout are $13 to $15 a share.

Traders can look to buy EJ off any weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support at $8.35 a share, or around its 50-day moving average at $7.96 a share. One can also buy EJ 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.

Dynavax Technologies

Another under-$10 bio therapeutic player that's starting to trend within range of triggering a major breakout trade is Dynavax Technologies (DVAX), which discovers and develops novel products to prevent and treat infectious and inflammatory diseases. This stock has been hit hard by the sellers so far in 2013, with shares off sharply by 55%.

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If you take a look at the chart for Dynavax Technologies, you'll notice that this stock has been trending inside of a big range for the last three months and change, with shares moving between $1.10 on the downside and $1.46 on the upside. This large consolidation pattern for DVAX could mean that this stock is under accumulation by the bulls, since the bears have been unable to push the stock out of this range and take it to new lows. Shares of DVAX are now starting to spike back above its 50-day moving average of $1.25 a share with decent upside volume. Volume so far on Thursday has already registered 1.6 million shares versus its three-month average action or 1.81 million shares. This move is starting to push DVAX within range of triggering a major breakout trade.

Market players should now look for long-biased trades in DVAX if it manages to break out above some key overhead resistance levels at $1.29 to $1.32 a share, and then once it takes out more resistance at $1.46 to $1.50 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 1.81 million shares. If that breakout hits soon, then DVAX will set up to re-test or possibly take out its next major overhead resistance level at $1.70 a share. Any high-volume move above $1.70 a share will then give DVAX a chance to re-fill some of its previous gap down zone from June that started at $2.60 a share.

Traders can look to buy DVAX off any weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support at $1.10 a share. One can also buy DVAX 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.

MeetMe

One under-$10 technology player that's starting to look poised for higher prices is MeetMe (MEET), which is a social network for meeting new people in the US and the public market leader in social discovery. This stock has been beaten-down by the bears so far in 2013, with shares off by 46%.

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If you take a look at the chart for MeetMe, you'll notice that this stock has been trending sideways and consolidating for the last month and change, with shares moving between $1.50 on the downside and $2.05 on the upside. Shares of MEET are now starting to spike higher right off its 50-day moving average. That spike is starting to push shares of MEET within range of triggering a near-term breakout trade above a key downtrend line that started back in early August.

Traders should now look for long-biased trades in MEET if it manages to break out above some near-term overhead resistances levels at $1.96 to its 200-day moving average at $2.06 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 812,971 shares. If that breakout triggers soon, then MEET will set up to re-test or possibly take out its next major overhead resistance levels at $2.27 to $2.76 a share. Any high-volume move above those levels will then give MEET a chance to tag $3.20 to $3.50 a share.

Traders can look to buy MEET off weakness to anticipate that breakout and simply use a stop that sits right below some near-term support levels at $1.70 or $1.60 a share. One can also buy MEET 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.

BioCryst Pharmaceuticals

Another under-$10 name in the bio therapeutic space that's starting to move within range of triggering a major breakout trade is BioCryst Pharmaceuticals (BCRX), which designs, optimizes and develops novel drugs that block key enzymes involved in cancer, viral infections and autoimmune diseases. This stock has been on fire so far in 2013, with shares up a whopping 380%.

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If you take a look at the chart for BioCryst Pharmaceuticals, you'll notice that this stock recently formed a double bottom chart pattern at $6.07 to $6.24 a share. Following that bottom, shares of BCRX are now starting to spike higher right off its 50-day moving average of $6.50 a share. That spike is quickly pushing shares of BCRX within range of triggering a major breakout trade.

Market players should now look for long-biased trades in BCRX if it manages to break out above some near-term overhead resistance levels at $6.88 to $6.89 a share, and then once it takes out more resistance at $7.56 to its 52-week high at $7.80 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 2.51 million shares. If that breakout triggers soon, then BCRX will set up to enter new 52-week-high territory above $7.80, which is bullish technical price action. Some possible upside targets off that breakout are $10 to $12 a share.

Traders can look to buy BCRX off weakness to anticipate that breakout and simply use a stop that sits right below those key near-term support levels at $6.24 to $6.07 a share. One can also buy BCRX 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.

Delcath Systems

One more under-$10 pharmaceutical and medical device player that looks ready to trend sharply higher is Delcath Systems (DCTH), which focuses on the treatment of primary and metastatic liver cancers. This stock has been hit hard by the bears so far in 2013, with shares off big by 64%.

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If you take a look at the chart for the Delcath Systems, you'll notice that this stock has dropped sharply over the last few weeks, with shares dropping from its high of 66 cents to 38 cents per share. That drop took shares of DCTH right to its 50-day moving average at 37 cents per share. Shares of DCTH are now starting to spike higher right off its 50-day, and it's quickly moving within range of triggering a near-term breakout trade.

Traders should now look for long-biased trades in DCTH if it manages to break out above some near-term overhead resistance at 46 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 2.62 million shares. If that breakout triggers soon, then DCTH will set up to re-test or possibly take out its next major overhead resistance levels at 66 cents per share to its 200-day moving average at 87 cents per share.

Traders can look to buy DCTH off weakness to anticipate that breakout and simply use a stop that sits right below its 50-day at 37 cents per share. One can also buy DCTH off strength once it clears 46 cents per share 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.