Stock Quotes in this Article: AMSC, CJJD, IMUC, OCLR, RVLT

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 big movers in the under-$10 complex from Wednesday, including LiveDeal (LIVE), which skyrocketed higher by 36.7%; Ocean Power Technologies (OPTT), which soared higher by 32.5%; Luna Innovations (LUNA), which ripped higher by 22.8%; and China Gengsheng Minerals (CHGS), which spiked higher by 18.1%. 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 spiked sharply higher after I featured it was technology player Infosonics (IFON), which I highlighted in Feb. 7's "5 Stocks Poised for Breakouts" at around $2.72 per share. I mentioned in that piece that shares of Infosonics had been uptrending strong over the last two months, with shares soaring higher from its low of 66 cents per share to its high of $3.08 a share. That uptrend was quickly pushing shares of IFON within range of triggering a big breakout trade above some near-term overhead resistance levels at $2.90 to its 52-week high at $3.08 a share.

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Guess what happened? Shares of Infosonics didn't wait long since the stock started to trigger that breakout the same day as my piece published. This stock tagged an intraday high the following trading session of $3.70 a share, which represents a gain of close to 40%. That's a monster move in just a few days for anyone who loaded up on shares of IFON to anticipate the breakout. I don't think the move higher for IFON is over yet, so traders should now look for much more upside if this stock manages to take out $3.70 a share soon with strong upside volume flows.

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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.

China Jo-Jo Drugstores


One under-$10 drug retailer that's starting to move within range of triggering a major breakout trade is China Jo-Jo Drugstores (CJJD), which is a distributor of pharmaceutical and other health care products in the People's Republic of China. This stock is off to a strong start in 2014, with shares up sharply by 56%.

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If you take a look at the chart for China Jo-Jo Drugstores, you'll notice that this stock has been trending sideways for the last month, with shares moving between $1.30 on the downside and $1.71 on the upside. Shares of CJJD are now starting to spike sharply higher off the lower-end of that range and it's quickly approaching a major breakout trade above a key downtrend line.

Traders should now look for long-biased trades in CJJD if it manages to break out above some near-term overhead resistance levels at $1.50 to $1.57 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 116,890 shares. If that breakout triggers soon, then CJJD will set up to re-test or possibly take out its next major overhead resistance levels at $1.71 to $1.90 a share, or its 52-week high at $1.99 a share. Any high-volume move above those levels will then give CJJD a chance to tag $2.50 a share.

Traders can look to buy CJJD off any weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support at $1.30 a share. One can also buy CJJD off strength once it starts to take out those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

ImmunoCellular Therapeutics


An under-$10 clinical-stage biotechnology player that's starting to trend within range of triggering a major breakout trade is ImmunoCellular Therapeutics (IMUC), which engages in developing and commercializing immune-based therapies for the treatment of brain, ovarian and other solid tumors. This stock is off to a hot start in 2014, with shares up big by 37%.

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If you take a look at the chart for ImmunoCellular Therapeutics, you'll notice that this stock has been uptrending strong for the last two months, with shares soaring higher from its low of 65 cents per share to its recent high of $1.58 a share. During that move, shares of IMUC have been making mostly higher lows and higher highs, which is bullish technical price action. Shares of IMUC are now starting to spike higher off its recent low of $1.12 a share and the stock is quickly moving within range of triggering a major breakout trade above some key near-term overhead resistance levels.

Market players should now look for long-biased trades in IMUC if it manages to break out above its 50-day moving average of $1.34 a share to some more key overhead resistance levels at $1.37 to $1.58 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 3.40 million shares. If that breakout hits soon, then IMUC will set up to re-fill some of its previous gap-down-day zone from last December that started near $3 a share. If IMUC can get into that gap with volume, then this stock could easily tag $2 to $2.50 a share.

Traders can look to buy IMUC off any weakness to anticipate that breakout and simply use a stop that sits right below some near-term support at $1.12 a share. One can also buy IMUC off strength once it starts to clear those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

Oclaro


One under-$10 technology player that's quickly moving within range of triggering a major breakout trade is Oclaro (OCLR), which designs, manufactures and markets lasers and optical components, modules and subsystems for the optical communications, industrial and consumer laser markets worldwide. This stock has been on fire over the last six months, with shares up sharply by 133%.

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If you take a look at the chart for Oclaro, you'll notice that this stock has been trending sideways and consolidating for the last month and change, with shares moving between $2.39 on the downside and $2.91 on the upside. Shares of OCLR are starting to rip sharply higher here and the stock is quickly moving within range of triggering a major breakout trade above the upper-end of its recent sideways trading chart pattern.

Traders should now look for long-biased trades in OCLR if it manages to break out above some near-term overhead resistance levels at $2.87 to its 52-week high at $2.91 a share and then once it clears some past resistance at $3.19 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 1.08 million shares. If that breakout triggers soon, then OCLR 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 OCLR off weakness to anticipate that breakout and simply use a stop that sits just below its 50-day moving average at $2.46 a share or below more key support at $2.39 a share. One can also buy OCLR off strength once it starts to clear those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

American Superconductor


Another under-$10 technology player that's quickly trending within range of triggering a near-term breakout trade is American Superconductor (AMSC), which provides megawatt-scale solutions that lower the cost of wind power and enhance the performance of the power grid. This stock has been hit hard by the bears over the last six months, with shares down sharply by 34%.

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If you take a look at the chart for American Superconductor, you'll notice that this stock recently formed a double bottom chart pattern at $1.37 to $1.43 a share. Following that bottom, shares of AMSC have started to rip higher and move back above its 50-day moving average of $1.56 a share. That sharp spike higher is now quickly pushing shares of AMSC within range of triggering a near-term breakout trade.

Market players should now look for long-biased trades in AMSC if it manages to break out above some near-term overhead resistance levels $1.72 to $1.83 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 844,058 shares. If that breakout hits soon, then AMSC will set up to re-test or possibly take out its next major overhead resistance levels at $2.04 to $2.13 a share, or even its 200-day at $2.18 to $2.30 a share.

Traders can look to buy AMSC off weakness to anticipate that breakout and simply use a stop that sits just below its 50-day moving average of $1.56 a share or below more support at $1.50 a share. One can also buy AMSC off strength once it starts to take out those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

Revolution Lighting Technologies


One final under-$10 technology player that's quickly moving within range of triggering a big breakout trade Revolution Lightning Technologies (RVLT), which engages in the design, manufacture, marketing, and sale of light-emitting diode replacement lamps and fixtures; and LED-based signage, channel-letter and contour lighting products. This stock is off to a modest start in 2014, with shares up by 3%.

If you take a look at the chart for Revolution Lightning Technologies, you'll notice that this stock is ripping higher here right off its 50-day moving average of $3.12 a share and back above its 200-day moving average of $3.53 a share with strong upside volume. This sharp spike higher is quickly pushing shares of RVLT within range of triggering a big breakout trade above some near-term overhead resistance levels.

Traders should now look for long-biased trades in RVLT if it manages to break out above some near-term overhead resistance levels at $3.70 to $3.77 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 669,116 shares. If that breakout hits soon, then RVLT will set up to re-test or possibly take out its next major overhead resistance levels at $4.40 to $4.73 a share. Any high-volume move above those levels will then give RVLT a chance to tag its next major overhead resistance levels at $4.94 to its 52-week high at $5.50 a share.

Traders can look to buy RVLT off weakness to anticipate that breakout and simply use a stop that sits right below its 50-day moving average of $3.12 a share or around $3 a share. One can also buy RVLT off strength once it starts to take out 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.