Stock Quotes in this Article: ARTX, CUR, IDIX, NVAX, PTIX

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 CombiMatrix (CBMX), which is exploding higher by 77%; Dex Media (DXM), which is ripping higher by 17%; Organovo (ONVO), which is spiking higher by 17%; and CounterPath (CPHA), which is jumping to the upside 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.

One low-priced stock that recently exploded higher was technology player Zhone Technologies (ZHNE), which I highlighted in Nov. 20's "4 Stocks Under $10 Moving Higher" at $3.95 per share. I mentioned in that piece that shares of Zhone Technologies were finding buying interest over the last few weeks each time it pulled back right near its 50-day moving average. That action was starting to push shares of ZHNE within range of triggering a major breakout trade above some key overhead resistance levels at $4.10 to $4.58 a share.

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Guess what happened? Shares of Zone Technologies didn't wait long to trigger that breakout, since the stock took out those key resistance levels the following day with monster upside volume. This stock exploded to the upside on Wednesday tagging an intraday high of $5.70 a share. That represents a gain of over 40% in just one day as shares of ZHNE exploded higher with bullish upside volume flows.

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 trade higher from current levels.

Arotech

One under-$10 stock that's quickly moving within range of triggering a major breakout trade is Arotech (ARTX), which is a defense and security products and services company, engaged in two business areas: interactive simulation for military, law enforcement and commercial markets; and batteries and charging systems for the military. This stock has been on fire so far in 2013, with shares up big by 98%.

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If you take a look at the chart for Arotech, you'll notice that this stock is spiking sharply higher today right above its 50-day moving average of $1.84 a share with above-average volume. Volume so far in Thursday has registered over 430,000 shares, which is well above its three-month average action of 302,874 shares. This spike is quickly pushing shares of ARTX within range of triggering a major breakout trade.

Traders should now look for long-biased trades in ARTX if it manages to break out above some key overhead resistance levels at $2.35 to its 52-week high at $2.71 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 302,874 shares. If that breakout hits soon, then ARTX will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $4 to $5 a share.

Traders can look to buy ARTX off any weakness to anticipate that breakout and simply use a stop that sits right below its 50-day moving average at $1.84 a share, or below more support at $1.63 a share. One can also buy ARTX 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.

Performance Technologies

Another stock that's starting to move within range of a big breakout trade is Performance Technologies (PTIX), which is a supplier of advanced network communications solutions to carrier, government and OEM markets. This stock has been red hot so far in 2013, with shares up huge by 275%.

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If you take a look at the chart for Performance Technologies, you'll notice that this stock has been trending sideways and consolidating for the last three months and change, with shares moving between $2.50 on the downside and $3.97 on the upside. Shares of PTIX have now started to spike higher back above its 50-day moving average of $2.92 a share with bullish upside volume flows. This spike is quickly pushing shares of PTIX 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 PTIX if it manages to break out above some key overhead resistance levels at $3.40 to $3.79 a share, and then once it takes out its 52-week high at $3.97 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 167,669 shares. If that breakout hits soon, then PTIX will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $6 to $7 a share.

Traders can look to buy PTIX off any weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support around $2.50 a share. One can also buy PTIX 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.

Neuralstem

An under-$10 biotechnology player that's starting to enter breakout territory is Neuralstem (CUR), which is engaged in the development and commercialization of treatments for central nervous system disease based on transplanting human neural stem cells and the use of small molecule drugs. This stock has been exploding to the upside in 2013, with shares up big by 139%.

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If you take a look at the chart for Neuralstem, you'll notice that this stock has been uptrending strong for the last month and change, with shares pushing higher from its low of $2.15 to its intraday high of $2.62 a share. During that uptrend, shares of CUR have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now started to push shares of CUR above a key downtrend line, which is bullish technical price action.

Traders should now look for long-biased trades in CUR if it manages to break out above some near-term overhead resistance levels at $2.75 to $2.97 a share, and then once it takes out its 52-week high at $3.02 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 1.10 million shares. If we get that move soon, then CUR will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are $4 to $5 a share.

Traders can look to buy CUR off weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support levels at $2.28 to $2.15 a share. One can also buy CUR 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.

Novavax

Another under-$10 biotechnology player that's starting to trend within range of triggering a major breakout trade is Novavax (NVAX), a clinical-stage biopharmaceutical company focused on developing recombinant protein nanoparticle vaccines to address a range of infectious diseases. This stock has been a monster for the bulls so far in 2013, with shares up a whopping 445%.

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If you take a look at the chart for Novavax, you'll notice that this stock has been uptrending for the last few weeks, with shares moving higher from its low of $2.68 to its intraday high of $3.27 a share. During that move, shares of NVAX have been consistently making higher lows and higher highs, which is bullish technical price action. That move is quickly pushing shares of NVAX within range of triggering a major breakout trade.

Market players should now look for long-biased trades in NVAX if it manages to break out above some near-term overhead resistance levels at $3.39 a share to its 52-week high at $3.50 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 3 million shares. If that breakout triggers soon, then NVAX will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $5 to $6 a share.

Traders can look to buy NVAX off weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support levels at $3 to $2.68 a share. One can also buy NVAX 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.

Idenix Pharmaceuticals

One final under-$10 biotechnology player that looks ready to trigger a near-term breakout trade is Idenix Pharmaceuticals (IDIX), which is engaged in the discovery and development of drugs for the treatment of human viral diseases with operations in the U.S. and Europe. This stock has been in play with the bulls during the last six months, with shares up 16%

If you take a look at the chart for Idenix Pharmaceuticals, you'll notice that this stock has been uptrending strong for the last month, with shares soaring higher from its low of $2.93 to its recent high of $4.83 a share. During that uptrend, shares of IDIX have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of IDIX within range of triggering a near-term breakout trade.

Traders should now look for long-biased trades in IDIX if it manages to break out above some near-term overhead resistance at $4.83 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 1.18 million shares. If that breakout triggers soon, then IDIX will set up to re-test or possibly take out its next major overhead resistance levels at $5.50 to its 52-week high at $5.93 a share. Any high-volume move above $5.93 will then give IDIX a chance to tag $7 a share.

Traders can look to buy IDIX off weakness to anticipate that breakout and simply use a stop that sits right below its 200-day moving average at $4.25 a share, or below more key support at $4 a share. One can also buy IDIX off strength once it clears $4.83 a 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.