Stock Quotes in this Article: ABIO, CYTR, SD, BGMD, MEIP, MSTX

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 Thursday, including Astrotech (ASTC), which is exploding higher by 73%; XG Technology (XGTI), which is soaring higher by 35%; Ventrus Biosciences (VTUS), which is ripping higher by 28%; and Netlist (NLST), which is moving to the upside by 23%. 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 ripped sharply higher was biopharmaceutical player CytRx (CYTR), which I highlighted in May 22's "5 Stocks Under $10 Set to Soar" at around $3.60 per share. I mentioned in that piece that CytRx was starting to spike higher right off its 50-day moving average and was quickly moving within range of triggering a big breakout trade above some near-term overhead resistance levels at $3.68 to its 200-day moving average of $3.86 a share.

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Guess what happened? Shares of CytRx triggered that breakout the following trading session with decent upside volume flows. Volume on that trading session registered 2.07 million shares, which is well above its two-month average volume of 1.36 million shares. Shares of CYTR continued to uptrend, with the stock tagging an intraday high on May 28 of $4.29 a share. That represents a fat gain of 20% for anyone who anticipated the breakout and bought in before the move. As you can see, trading breakouts on small-cap stocks can produce solid gains very quickly.

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.

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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.

Arca Biopharma


One under-$10 biopharmaceutical player that's starting to move within range of triggering a near-term breakout trade is Arca Biopharma (ABIO), which focuses on developing genetically targeted therapies for cardiovascular diseases. This stock has been under pressure by the sellers over the last three months, with shares down by 22%.

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If you glance at the chart for Arca Biopharma, you'll notice that this stock has been downtrending badly for the last three months, with shares moving lower from its high of $2.38 to its recent low of $1.34 a share. During that downtrend, shares of ABIO have been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of ABIO have recently formed a double bottom chart pattern $1.35 to $1.34 a share. This stock has now started to rebound 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 ABIO if it manages to break out above some near-term overhead resistance levels at $1.48 to $1.50 a share 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 655,086 shares. If that breakout hits soon, then ABIO will set up to re-test or possibly take out its next major overhead resistance levels at its 50-day moving average of $1.65 to $1.75 a share. Any high-volume move above $1.75 will then give ABIO a chance to re-test or take out $2 a share.

Traders can look to buy ABIO off weakness to anticipate that breakout and simply use a stop that sits right below those double bottom support levels at $1.35 to $1.34 a share. One can also buy ABIO 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.

MEI Pharma


Another under-$10 development-stage oncology player that's starting to push within range of triggering a big breakout trade is MEI Pharma (MEIP), which focuses on the clinical development of therapeutics for the treatment of cancer. This stock has been hit hard by the sellers so far in 2014, with shares down by 20%.

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If you take a look at the chart for MEI Pharma, you'll see that this stock has been downtrending badly for the last two months, with shares plunging lower from its high of $13.98 to its 52-week low of $5.70 a share. During that downtrend, shares of MEIP have been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares if MEIP have now started to rebound off that 52-week low of $5.70 and it's beginning to trend within range of triggering a big breakout trade.

Market players should now look for long-biased trades in MEIP if it manages to break out above some near-term overhead resistance levels at $6.45 to $6.53 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 253,397 shares. If that breakout materializes soon, then MEIP will set up to re-test or possibly take out its next major overhead resistance levels at $7.44 to its 200-day moving average of $8.50 a share. Any high-volume move above $8.55 will then give MEIP a chance to tag its next major overhead resistance levels at $9.40 to $10.27 a share.

Traders can look to buy MEIP off weakness to anticipate that breakout and simply use a stop that sits right below its recent 52-week low of $5.70 a share. One can also buy MEIP 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.

Mast Therapeutics


One under-$10 biopharmaceutical player that's starting to move within range of triggering a major breakout trade is Mast Therapeutics (MSTX), which focuses on developing therapies for serious or life-threatening diseases. This stock is off to a monster start in 2014, with shares up large by 46%.

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If you take a glance at the chart for Mast Therapeutics, you'll notice that this stock recently formed a double bottom chart pattern at 51 to 52 cents per share. Following that bottom, shares of MSTX have started to uptrend with the stock tagging its recent high of 72 cents per share. That uptrend has pushed shares of MSTX back above both its 50-day and 200-day moving averages, which is bullish. Shares of MSTX are now starting to move within range of triggering a major breakout trade above some key near-term overhead resistance.

Traders should now look for long-biased trades in MSTX if it manages to break out above some near-term overhead resistance at 72 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 2.08 million shares. If that breakout triggers soon, then MSTX will set up to re-test or possibly take out its next major overhead resistance levels at 78 to 80 cents per share, or even 85 to 93 cents per share.

Traders can look to buy MSTX off weakness to anticipate that breakout and simply use a stop that sits right below its 50-day moving average of 63 cents per share. One can also buy MSTX off strength once it starts to clear 72 cents per share with volume and then simply use a stop that sits a comfortable percentage from your entry point.

SandRidge Energy


Another under-$10 energy player that's quickly pushing within range of triggering a big breakout trade is SandRidge Energy (SD), which explores for and produces oil and natural gas properties primarily in the Mid-Continent region of the U.S. This stock is off to a decent start in 2014, with shares up by 11%.

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If you look at the chart for SandRidge Energy, you'll see that this stock is bouncing notably higher today right off its 50-day moving average of $6.55 a share. Shares of SD have been trending sideways and consolidating for the last month and change, with shares moving between $6.50 on the downside and $7.10 on the upside. This bounce off the 50-day is starting to push shares of SD 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 SD if it manages to break out above some near-term overhead resistance levels at $6.87 to $6.95 a share and then once it takes out its 52-week high at $7.10 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 8.58 million shares. If that breakout gets underway soon, then SD 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 nest major overhead resistance levels at $7.50 to $8 a share. Any high-volume move above $8 to $8.16 a share will then give SD a chance to tag $9 to $10 a share.

Traders can look to buy SD off weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support levels at $6.51 to $6.50 a share. One can also buy SD off strength once it starts to move above those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

TetraLogic Pharmaceuticals


One final under-$10 stock that looks ready to make an explosive move higher is TetraLogic Pharmaceuticals (TLOG), which focuses on discovering and developing novel small molecule therapeutics that mimic novel second mitochondrial activator of caspases to cause or enable abnormal cells, which are resistant to the body's immune system to self-destruct. This stock has been absolutely destroyed the short-sellers in 2014, with shares down sharply by 6%.

If you take a glance at the chart for TLOG, you'll notice that this stock has been downtrending badly over the last five months, with shares plunging lower from its high of $14.75 to its recent all-time low of $3.84 a share. During that downtrend, shares of TLOG have been mostly making lower highs and lower lows, which is bearish technical price action. That move has now pushed shares of TLOG into extremely oversold territory, since its current relative strength index reading is 31. That said, shares of TLOG are now starting to rebound off its all-time low of $3.84 a share and it's quickly moving within range of triggering a big breakout trade.

Traders should now look for long-biased trades in TLOG if it manages to break out above some near-term overhead resistance at $4.50 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 118,034 shares. If that breakout materializes soon, then TLOG will set up re-test or possibly take out its next major overhead resistance levels at its 50-day moving average of $6.09 a share to $6.22 to $6.35 a share. Any high-volume move above those levels will then give TLOG a chance to tag $7 to $8 a share.

Traders can look to buy TLOG off weakness to anticipate that breakout and simply use a stop that sits right below its all-time low of $3.84 a share. One can also buy TLOG off strength once it starts to take out resistance at $4.50 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.