Stock Quotes in this Article: AMRN, CDTI, KGJI, NGD, STSI, TGD

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 Stocks With Big Insider Buying

Just take a look at some of the big movers in the under-$10 complex from Thursday, including Timberline Resources (TLR), which is exploding higher by over 35%; U.S. Geothermal (HTM), which is surging higher by 25%; Venaxis (APPY), which is ripping to the upside by 20%; and Tianli Agritech (OINK), which is soaring to the upside by 20%. 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 vehicle emissions control systems player Clean Diesel Technologies (CDTI), which I highlighted in Feb. 26's "5 Stocks Ready to Explode Higher" at around $2.55 per share. I mentioned in that piece that shares of Clean Diesel Technologies had recently started to rebound off its low of $2.08 a share after it pulled back from its high of $3.48 a share. That rebound was starting to push shares of CDTI within range of triggering a major breakout trade above some near-term overhead resistance levels at $2.76 to $2.90 a share.

>>Invest Like a Hedge Fund With the Pros' Top 5 Stocks

Guess what happened? Shares of Clean Diesel Technologies broke out above those resistance levels a few trading sessions later and the stock tagged an intraday high of $3.55 a share. Shares of CDTI pulled back again to $2.81 a share and that pullback never violated its 50-day moving average or made a lower low. Shares of CDTI exploded higher on Tuesday with monster upside volume and the stock tagged an intraday high of $7.39 a share. That represents a massive gain of close to 200% in a very short timeframe for shares of CDTI.

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.

>>3 Huge Stocks on Traders' Radars

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.

Kingold Jewelry


One under-$10 gold player that's starting to move within range of triggering a major breakout trade is Kingold Jewelry (KGJI), which engages in the design, manufacture and sale of gold jewelry, ornaments and investment-oriented products in the People's Republic of China. This stock is off to a decent start in 2014, with shares up by 10%.

>>5 Hated Earnings Stocks You Should Love

If you take a glance at the chart for Kingold Jewelry, you'll see that this stock has been trending sideways and consolidating for the last four months and change, with shares moving between $1.52 on the downside and $2.04 on the upside. Shares of KGJI are spiking higher today back above its 50-day moving average of $1.80 per share. That spike is quickly pushing shares of KGJI 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 KGJI if it manages to break out above some near-term overhead resistance levels $1.91 to $1.99 a share and then once it clears some past overhead resistance levels at $2.02 to $2.04 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 215,267 shares. If that breakout gets underway soon, then KGJI will set up to re-test or possibly take out its next major overhead resistance level at its 52-week high of $2.45 a share. Any high-volume move above that level will then give KGJI a chance to tag $3 to $3.50 a share.

Traders can look to buy KGJI off weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support levels at $1.63 to $1.52 a share. One can also buy KGJI 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.

Amarin


Another under-$10 biopharmaceutical player that's quickly moving within range of triggering a major breakout trade is Amarin (AMRN), which focuses on the development and commercialization therapeutic products for the treatment for cardiovascular diseases in the U.S. This stock has been destroyed by the sellers over the last six months, with shares off by 70%.

>>5 Rocket Stocks Ready for Blastoff This Week

If you take a look at the chart for Amarin, you'll notice that this stock has formed a triple bottom chart pattern over the last two months, with shares finding buying interest at $1.60, $1.72 and $1.68 a share. Shares of AMRN are now starting to uptrend off those support levels and move back above its 50-day moving average of $1.88 a share. That move is quickly pushing this stock within range of triggering a major breakout trade.

Market players should now look for long-biased trades in AMRN if it manages to break out above some near-term overhead resistance levels at $1.97 a share to its intraday high of $1.99 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 5.68 million shares. If that breakout starts soon, then AMRN will set up to re-fill its previous gap-down-day zone from January that started near $2.50 a share. If that gap gets filled with strong volume and AMRN takes out more resistance at $2.75 a share, then another monster gap-down-day zone from last October will come into play.

Traders can look to buy AMRN off weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support levels at $1.68 to $1.60 a share. One can also buy AMRN 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.

Timmins Gold


One under-$10 gold player that's quickly moving within range of triggering a near-term breakout trade is Timmins Gold (TGD), which engages in the acquisition, exploration, development and operation of mineral resource properties in Mexico. This stock is off to a fast start in 2014, with shares up big by 39%.

>>5 Stock Charts Screaming "Buy"

If you consult the chart for Timmins Gold, you'll see that this stock has been uptrending strong for the last two months and change, with shares moving higher from its low of 97 cents per share to its recent high of $1.63 a share. During that uptrend, shares of TGD have been making mostly higher lows and higher highs, which is bullish technical price action. Shares of TGD recently formed a triple bottom chart pattern at $1.42, $1.38 and $1.38 a share. This stock is starting to spike higher off those support levels and it's quickly moving within range of triggering a near-term breakout trade.

Traders should now look for long-biased trades in TGD if it manages to break out above some near-term overhead resistance levels at $1.57 to $1.63 a share and then once it clears more resistance at its 200-day moving average of $1.68 to $1.69 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 363,192 shares. If that breakout triggers soon, then TGD will set up to re-test or possibly take out its next major overhead resistance levels at $2 to $2.25 a share, or even $2.50 to $3 a share.

Traders can look to buy TGD off weakness to anticipate that breakout and simply use a stop that sits right around its 50-day moving average of $1.37 a share. One can also buy TGD off strength once it starts to bust above those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

New Gold


Another under-$10 gold mining player that's quickly trending within range of triggering a big breakout trade is New Gold (NGD), which engages in the acquisition, exploration, extraction, processing and reclamation of mineral properties. This stock is off to a strong start in 2014, with shares up sharply by 20%.

>>3 Stocks Breaking Out on Big Volume

If you take a glance at the chart for New Gold, you'll notice this stock recently formed a double bottom chart pattern at $5.96 to $5.91 a share right above its 50-day moving average of $5.84 a share. This stock has now started to rip higher off those support levels and it's now trending back above its 200-day moving average of $6.11 a share. That move is quickly pushing shares of NGD within range of triggering a big breakout trade above some key near-term overhead resistance levels.

Market players should now look for long-biased trades in NGD if it manages to break out above some key near-term overhead resistance levels at $6.37 to $6.52 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 3.58 million shares. If that breakout kicks off soon, then NGD will set up to re-test or possibly take out its next major overhead resistance levels at $8.10 to $10 a share, or even $11 a share.

Traders can look to buy NGD off weakness to anticipate that breakout and simply use a stop that sits right below its 50-day moving average of $5.84 a share. One can also buy NGD off strength once it starts blast above those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

Star Scientific


One final under-$10 health care player that's quickly moving within range of triggering a major breakout trade is Star Scientific (STSI), which engages in the development, manufacture, sale and marketing of nutraceutical dietary supplements and consumer products. This stock has been hit hard by the bears over the last six months, with shares down by 45%.

If you take a look at the chart for Star Scientific, you'll see that this stock has been uptrending strong for the last month and change, with shares soaring higher from its low of 55 cents to its intraday high of $1.08 a share with bullish upside volume flows. This stock has recently started to spike higher off its low of 81 cents per share and it's now trending back above its 50-day moving average of 87 cents per share. That move is starting to push shares of STSI within range of triggering a major breakout trade above some key near-term overhead resistance levels.

Traders should now look for long-biased trades in STSI if it manages to break out above some near-term overhead resistance levels at $1.06 to $1.14 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 1.68 million shares. If that breakout materializes soon, then STSI will set up re-test or possibly take out its next major overhead resistance levels $1.35 to $1.40 a share, or even its 200-day moving average of $1.49 a share. Any high-volume moves above its 200-day will then give STSI a chance to tag $1.70 to $1.90 a share.

Traders can look to buy STSI off weakness to anticipate that breakout and simply use a stop that sits right around its 50-day at 87 cents per share or near more key support at 81 cents per share. One can also buy STSI 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.


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.