Stock Quotes in this Article: FLML, GGS, SCMP, TA, BV

WINDERMERE, Fla. (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.

Just take a look at some of the hot movers in the under-$10 complex from today, including Sinovac Biotech (SVA), which is ripping higher by 31%; Arca Biopharma (ABIO), which is surging by 26%; RiT Technologies (RITT), which is jumping up by 16.2%; and Neurometrix (NURO), which is advancing by 15.9%. You don’t even have to catch the entire move in lower-priced stocks such as these to make outsized returns when trading.

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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.

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Global Geophysical Services

One under-$10 stock that’s trending very close to trigger a major breakout trade is Global Geophysical Services (GGS), which provides an integrated suite of seismic data solutions to the global oil and gas industry. This stock has smashed lower by the sellers, with shares off by 33% so far in 2013.

If you take a look at the chart for Global Geophysical Services, you’ll notice that this stock recently crashed hard from its high of $4.73 to its 52-week low of $2.22 a share with heavy downside volume. Following that plunge, shares of GGS have started to stabilize and make higher lows with the stock now trading at around $2.60 a share. That move is quickly pushing shares of GGS within range of triggering a major breakout trade.

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Traders should now look for long-biased trades in GGS if it manages to break out above some near-term overhead resistance levels at $2.63 to $2.65 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 276,308 shares. If that breakout triggers soon, then GGS could explode to the upside and possibly trend back towards its 50-day moving average of $3.63 a share.

Traders can look to buy GGS off any weakness to anticipate that breakout and simply use a stop that sits just below some near-term support levels at $2.42 to $2.33 a share, or even around its 52-week low of $2.22 a share. One can also buy GGS off strength once it takes out those breakout levels with volume and then simply use a stop that sits just below $2.33 a share.

TravelCenters of America

Another under-$10 stock that looks ready to trigger a near-term breakout trade is TravelCenters of America (TA), which operates and franchises travel centers mainly along the U.S. interstate highway system. This stock has been on fire in 2013, with shares up 58% so far.

This company has a catalyst trade on the horizon, since the firm will report its fourth-quarter earnings on Monday, March 18. This sets up the stock from some possible bullish price action ahead and potentially after the quarter is reported.

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If you take a look at the chart for TravelCenters of America, you’ll notice that this stock has been uptrending strong over the last month, with shares moving higher from its low of $6.44 to its recent high of $7.60 a share. During that uptrend, shares of TA have been mostly making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of TA within range of triggering a near-term breakout trade.

Market players should now look for long-biased trades in TA if it manages to break out above some near-term overhead resistance levels at $7.60 to $7.64 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 315,943 shares. If that breakout hits soon, then TA will set up to enter new 52-week-high territory above $7.98 a share. Some possible upside targets off that breakout are $8 to $9.95 a share.

Traders can look to play TA for some upside action ahead of the quarter if that breakout triggers soon, and you can also wait until after the quarter is reported to play TA if it clears the key overhead resistance levels I’ve highlighted above.

Traders can buy TA off any weakness to anticipate that breakout and simply use a stop that sits just below some key near-term support levels at $7.01 to $6.71 share. One can also buy off strength once TA takes out those breakout levels with volume and then simply use a stop that sits just below $7.25 a share.

Bazaarvoice

Another under-$10 name that’s trending very close to triggering a near-term breakout trade is Bazaarvoice (BV), which provides social commerce solutions that help its clients capture, display and analyze online word of mouth. This stock has been pounded lower by the bears during the last six months, with shares off by 49%.

If you take a look at the chart for Bazaarvoice, you’ll notice that this stock has been downtrending badly over the last six months, with shares dropping from over $15 to its recent low of $6.37 a share. During that downtrend, shares of BV have been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of BV have now started to rebound off that $6.37 low and are flirting with its 50-day moving average of $7.41 a share. That rebound is quickly pushing shares of BV within range of triggering a near-term breakout trade.

Traders should now look for long-biased trades in BV if it manages to break out above some key overhead resistance levels at $7.28 to $7.41 a share and then once it takes out more resistance levels at $7.95 to $8.07 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 848,570 shares. If that breakout triggers soon, then BV will set up to re-test or possibly take out its next major overhead resistance levels at $9 to $9.98 a share. Any high-volume move above $9.98 will then put $11 to its 200-day moving average at $12.50 into range for shares of BV.

Traders can look to buy BV off any weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support at $6.75 a share. One could also buy BV off strength once it clears those breakout levels with volume and simply use a stop that sits just below its 50-day at $7.41 a share. I would add to either position once BV clears $7.95 to $8.07 a share with strong upside volume.

Sucampo Pharmaceuticals

Another under-$10 name that’s starting to trend within range of triggering a near-term breakout trade is Sucampo Pharmaceuticals (SCMP), a biopharmaceutical company focused on the discovery, development and commercialization of proprietary drugs based on prostones, a class of compounds derived from functional fatty acids that occur naturally in the human body. This stock has been moving up notably over the last six months, with shares up 14%.

If you take a look at the chart for Sucampo Pharmaceuticals, you’ll notice that this stock recently traded down to $4.55 a share and found some buying interest. That $4.55 level is very close to some key previous support levels from last November at $4.51 to $4.54 a share. It looks like shares of SCMP have formed a double bottom at those levels and it is now starting to challenge both its 50-day at $5.14 a share and its 200-day at $5.20 a share. That move is quickly pushing shares of SCMP within range of triggering a near-term breakout trade.

Market players should now look for long-biased trades in SCMP if it manages to break out above its 200-day moving average at $5.20 a share and then once it clears more near-term overhead resistance levels at $5.42 to $5.53 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 94,210 shares. If that breakout triggers soon, then SCMP will set up to re-test or possibly take out its next major overhead resistance levels at $6.25 a share. Any high-volume move above $6.25 will then give SCMP a chance to re-fill some of its previous gap down zone from last July that started near $7 a share.

Traders can look to buy SCMP off any weakness to anticipate that breakout and simply use a stop that sits right below today’s low of $5 a share. One could also buy SCMP off strength once it takes out those breakout levels with volume and then simply use the same stop right around its 50-day at $5.14 a share.

Flamel Technologies

One final under-$10 name that’s trending very close to triggering a near-term breakout trade is Flamel Technologies (FLML), a biopharmaceutical company mainly engaged in the development of two unique polymer-based drug delivery technologies for the improvement of medical applications. This stock is off to a hot start in 2013, with shares up 36%.

If you take a look at the chart for Flamel Technologies, you’ll see that this stock has been uptrending strong for the last month, with shares moving higher from its low of $3.30 a share to its intraday high of $4.14 a share. During that uptrend, shares of FLML have been consistently making higher lows and higher highs, which is bullish technical price action. That move is quickly pushing FLML within range of triggering a near-term breakout trade.

Traders should now look for long-biased trades in FLML if it manages to break out above some near-term overhead resistance levels at $4.09 a share and at its 200-day moving average of $4.10 a share and 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 45,383 shares. If that breakout triggers soon, then FLML will set up to re-test or possibly take out its next major overhead resistance levels at $4.69 to $5 a share. Any high-volume move above $5 will then put $5.50 to $5.75 into range for shares of FLML.

Traders can look to buy FLML off any weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support levels at $3.82 to $3.80 a share. One could also buy FLML off strength once it clears those breakout levels with volume and then simply use a stop that sits right below its 50-day moving average at $3.91 a share.

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 Winderemere, Fla.

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At the time of publication, author had no positions in stocks mentioned.

Roberto Pedone, based out of Windermere, Fla., 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.