Stock Quotes in this Article: ASTI, AVNW, HPJ, NIHD, VICL, XGTI

DELAFIELD, Wis. (Stockpickr) -- There isn't a day that goes by on Wall Street when certain stocks trading for under $10 a share 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 USEC (USU), which soared higher by 22%; NeoGenomics (NEO), which ripped to the upside by 20%; Timberline Resources (TLR), which spiked higher by 13.8%; and Timmins Gold (TGD), which trended to the upside by 12.7%. 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 wireless communications player that recently ripped to the upside was NII Holdings (NIHD), which I highlighted in July 11's "5 Stocks Under $10 Set to Soar" at around 64 cents per share. I mentioned in that piece that shares of NII Holdings recently formed a double bottom chart pattern at around 57 to 54 cents per share. This stock was just starting to flirt with its 50-day moving average of 63 cents per share and it was quickly moving within range of triggering a major breakout trade above a key downtrend line at around 66 cents per share.

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Guess what happened? Shares of NII Holdings started to trigger that breakout the same day as I highlighted the stock in my piece with decent upside volume. Then the following trading session shares of NIHD ripped sharply to the upside with strong upside volume, after 12.39 million shares traded vs. its three-month average action of 5.03 million shares. Shares of NIHD tagged an intraday high on July 15 of 84 cents per share, which represents a monster of gain of 30% in just three trading sessions. As you can see, trading small-cap stocks that breakout with volume can produce large profits 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.

Aviat Networks

One under-$10 technology player that's starting to trend within range of triggering a major breakout trade is Aviat Networks (AVNW), which designs, manufactures and sells a range of wireless networking products, solutions, and services in North America and Internationally. This stock has been hit hard by the sellers so far in 2014, with shares off sharply by 45%.

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If you take a glance at the chart for Aviat Networks, you'll see that this stock has been uptrending over the last two months and change, with shares moving higher from its low of 99 cents per share to its recent high of $1.35 a share. During that uptrend, shares of PRKR have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of AVNW within range of triggering a major breakout trade.

Traders should now look for long-biased trades in AVNW if it manages to break out above some near-term overhead resistance levels at $1.28 to $1.30 a share and then once it clears $1.35 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 861,975 shares. If that breakout triggers soon, then AVNW will set up to re-fill some of its previous gap-down-day zone from May that started near $1.60 a share.

Traders can look to buy AVNW off weakness to anticipate that breakout and simply use a stop that sits just below its 50-day moving average of $1.15 a share. One can also buy AVNW 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.

Vical

An under-$10 biotechnology player that's starting to trend within range of triggering a big breakout trade is Vical (VICL), which is engaged in the research and development of biopharmaceutical products based on its DNA delivery technologies for the prevention and treatment of serious or life-threatening diseases. This stock has been trending lower over the last three months, with shares off by 24%.

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If you take a look at the chart for Vical, you'll notice that this stock has recently formed a double bottom chart pattern at $1.12 to $1.14 a share. Following that bottom, shares of VICL have started to trend back above its 50-day moving average of $1.20 with strong upside volume flows. This move has now pushed shares of VICL 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 is VICL if it manages to break out above its 200-day moving average of $1.27 to some more key overhead resistance at $1.30 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 955,230 shares. If that breakout gets started soon, then VICL will set up to re-test or possibly take out its next major overhead resistance levels at $1.36 to $1.40, or even $1.50 to $1.60 a share.

Traders can look to buy VICL off weakness to anticipate that breakout and simply use a stop that sits right below its 50-day at $1.20 or below more key near-term support at $1.14 a share. One can also buy VICL 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.

Ascent Solar Technologies

One under-$10 solar power player that's starting to trend within range of triggering a major breakout trade is Ascent Solar Technologies (ASTI), which designs and manufactures photovoltaic integrated consumer electronics as well as portable power applications for commercial and military users. This stock has been hammered lower by the bears so far in 2014, with shares down sharply by 40%.

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If you take a glance at the chart for Ascent Solar Technologies, you'll notice that this stock recently formed a double bottom chart pattern at 38 cents to 39 cents per share. Shares of ASTI are now starting to spike sharply higher off those support levels and back above its 50-day moving average of 41 cents per share. Volume on Thursday registered 1.29 million shares, which is well above three-three month average action of 747,366 a share. That move is quickly pushing shares of ASTI 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 ASTI if it manages to break out above some near-term overhead resistance levels at 45 to 48 cents per share and then once it clears 50 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 747,366 shares. If that breakout materializes soon, then ASTI will set up to re-test or possibly take out its next major overhead resistance levels at 55 to 60 cents per share, or even its 200-day moving average of 65 cents per share.

Traders can look to buy ASTI off weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support levels at 39 to 38 cents per share or near 37 to 36 cents per share. One can also buy ASTI 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.

xG Technology

An under-$10 wireless communications player that's starting to move within range of triggering a near-term breakout trade is xG Technology (XGTI), which develops communications technologies for wireless networks worldwide. It primarily offers a portfolio of intellectual property to enhance wireless communications. This stock is off to a hot start in 2014, with shares up sharply by 35%.

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If you look at the chart for xG Technology, you'll see that this stock has been consistently making higher lows for the last two months and change. This higher lows chart pattern has now formed a strong support level for shares of XGTI each time it has pulled back over that timeframe. Shares of XGTI counter-trended higher on Thursday vs. the overall market weakness and the stock flirted with and closed above its 200-day moving average. That move is quickly pushing shares of XGTI within range of triggering a near-term breakout trade above some key overhead resistance levels.

Market players should now look for long-biased trades in XGTI if it manages to break out above Thursday's intraday high of $2.22 a share to some more key overhead resistance at $2.35 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 volume of 1.02 million shares. If that breakout gets underway soon, then XGTI will set up to re-test or possibly take out its next major overhead resistance levels at $3.01 to $3.85 a share.

Traders can look to buy XGTI off weakness to anticipate that breakout and simply use a stop that sits right below some near-term support at $2 a share or right around its 50-day moving average of $1.85 a share. One can also buy XGTI 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.

Highpower International


One final under-$10 stock that looks ready to trigger a near-term breakout trade is Highpower International (HPJ), which manufactures and trades nickel metal hydride rechargeable batteries for portable electronic devices. This stock is off to a blazing hot start in 2014, with shares up substantially by 80%.

If you take a glance at the chart for Highpower International, you'll see that this stock has recently formed a major bottoming chart pattern over the last month and change, with shares finding buying support at $4.13, $4.40 and $4.20 a share. Shares of HPJ counter-trend higher versus the overall market weakness on Thursday as the stock bounced notably higher right off its 50-day moving average of $4.37 a share. That spike is starting to push shares of HPJ within range of triggering a near-term breakout trade above some key overhead resistance levels.

Traders should now look for long-biased trades in HPJ if it manages to break out above some near-term overhead resistance levels at $4.78 to $5 a share and then once it takes out more key overhead resistance levels at $5.28 to $5.33 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 volume of 260,744 shares. If that breakout kicks off soon, then HPJ will set up re-test or possibly take out its next major overhead resistance levels at $5.68 to $6.50, or even around $7 to $7.50 a share.

Traders can look to buy HPJ off weakness to anticipate that breakout and simply use a stop that sits right around some key near-term support levels at $4.20 to $4.13 share. One can also buy HPJ 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.

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.