Stock Quotes in this Article: CADX, CBLI, FRO, TNK, TKMR

 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 Wednesday, including Eagle Bulk Shipping (EGLE), which ripped higher by 15.8%; Supernus Pharmaceuticals (SUPN), which trended up by 10.2%; Spanish Broadcasting System (SBSA), which jumped up by 9.2%; and Planar Systems (PLNR), which trended up by 8.4%. 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 trade higher from current levels.

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Tekmira Pharmaceuticals

One under-$10 stock that’s trending very close to trigger a near-term breakout trade is Tekmira Pharmaceuticals (TKMR), which is engaged in a biopharmaceutical business focused on advancing novel RNA interference therapeutics and providing its lipid nanoparticle delivery technology to pharmaceutical partners. This stock is off to a slow start in 2013, with shares off by 3.2%.

If you take a look at the chart for Tekmira Pharmaceuticals, you’ll notice that this stock is just starting to trend back above its 50-day moving average of $4.70 a share with heavy upside volume. Volume so far today has already registered over 313,000 shares, which is well above its three-month average action of 33,912 shares. That move is quickly pushing shares of TKMR within range of triggering a near-term breakout trade.

Traders should now look for long-biased trades in TKMR if it manages to break out above some near-term overhead resistance levels at $4.87 to $4.94 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 33,912 shares. If that breakout triggers soon, then TKMR will set up to re-test or possibly take out its next major overhead resistance levels at $5.53 to $5.78 a share. Any high-volume move above $5.78 will then put $6.78 into range for shares of TKMR.

Traders can look to buy TKMR off any weakness to anticipate that breakout and simply use a stop that sits just below some near-term support at around $4.50 a share. One can also buy TKMR off strength once it takes out those breakout levels with volume and then simply use a stop that sits right below its 50-day moving average of $4.70 a share.

Frontline

Another under-$10 stock that looks ready to trigger a major breakout trade is Frontline (FRO), which is engaged mainly in the ownership and operation of oil tankers and oil/bulk/ore carriers, which are currently configured to carry dry cargo. This stock has been hammered by the bears in 2013, with shares off by 31%.

If you take a look at the chart for Frontline, you’ll notice that this stock recently plunged badly from its high of $3.68 to its low of $1.81 a share with heavy downside volume. During that move, shares of FRO were consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of FRO have started to rebound off that $1.81 low to its recent high of $2.37 a share. This stock has been making higher lows during that rebound and it’s quickly moving within range of triggering a major breakout trade.

Market players should now look for long-biased trades in FRO if it manages to break out above some near-term overhead resistance levels at $2.30 to $2.37 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 861,670 shares. If that breakout hits soon, then FRO could experience a powerful bounce higher that takes it back toward its 50-day moving average of $2.86 a share or back to its 200-day moving average at $3.49 a share.

Traders can look to buy FRO off any weakness to anticipate that breakout and simply use a stop that sits right around some key near-term support levels at $2.06 to $1.92 a share. One could also buy FRO off strength once it clears those breakout levels with volume and then simply use a stop right below $2.06 a share.

Cadence Pharmaceuticals

An under-$10 stock that’s already starting to trigger a major breakout trade is Cadence Pharmaceuticals (CADX), which is focused on in-licensing, developing and commercializing product candidates mainly for use in the hospital setting. This stock is off to a decent start in 2013, with shares up 19%.

If you take a look at the chart for Cadence Pharmaceuticals, you’ll notice that this stock is just starting to explode off its 50-day moving average of $5.08 a share with solid upside volume. Volume so far today has registered 239,000 shares, which is on pace to easily surpass its three-month average action of 269,172 shares. This move has started to push shares of CADX back above some key near-term overhead resistance levels at $5.46 to $5.66 a share, since the stock has hit an intraday high of $5.73 a share.

Traders should now look for long-biased trades in CADX if it manages sustains a move or close above those breakout levels at $5.46 to $5.66 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 269,172 shares. If CADX can sustain this breakout, then the stock will set up to re-test or possibly take out its next major overhead resistance levels at $7 to $7.78 a share.

Traders can look to buy CADX off any weakness and simply use a stop that sits just below its 50-day moving average of $5.08 a share.

Cleveland BioLabs

Another under-$10 stock that looks set to trigger a major breakout trade is Cleveland BioLabs (CBLI), which is a drug discovery and development company leveraging its proprietary discoveries around programmed cell death to develop treatments for cancer and protection of normal tissues from radiation and other stresses. This stock has been on fire in 2013, with shares up a whopping 45%.

If you take a look at the chart for Cleveland BioLabs, you’ll notice that this stock has recently ripped higher back above its 50-day moving average at $1.62 a share and above its 200-day moving average of $1.71 a share with solid upside volume flows. That move is quickly pushing shares of CBLI within range of triggering a major breakout trade.

Market players should now look for long-biased trades in CBLI if it manages to break out above some near-term overhead resistance at $1.94 a share and then once it takes out its previous gap down day high from last October at $2 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 227,265 shares. If that breakout triggers soon, then CBLI will set up to re-fill some of that previous gap down zone that started at $2.70 a share. If that gap gets filled, then CBLI could easily trend well north of $3 a share.

Traders can look to buy CBLI off any weakness to anticipate that breakout and simply use a stop that sits right below its 50-day at $1.62 a share. One could also buy CBLI off strength once it takes out those breakout levels with volume and then simply use a stop right below its 200-day at $1.71 a share.

Teekay Tankers

One final under-$10 stock that’s trending very close to triggering a near-term breakout trade is Teekay Tankers (TNK), which is in the business of owning oil tankers and employing chartering strategy that seeks to capture upside opportunities in the spot market while using fixed-rate time charters to reduce downside risks. This stock has been hit hard by the sellers during the last six months, with shares off by 31%.

If you take a look at the chart for Teekay Tankers, you’ll see that this stock has been uptrending modestly for the last month, with shares moving higher from its low of $2.40 a share to its recent high of $2.86 a share. During that uptrend, shares of TNK have been mostly making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of TNK within range of triggering a near-term breakout trade.

Traders should now look for long-biased trades in TNK if it manages to break out above its 50-day moving average of $2.81 a share and then once it clears more overhead resistance at $2.86 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 479,772 shares. If that breakout triggers soon, then TNK will set up to re-test or possibly take out its next major overhead resistance levels at $3.43 to its 200-day moving average of $3.46 a share. Any high-volume move above $3.46 will then put $3.75 to $4.32 into range for shares of TNK.

Traders can look to buy TNK off any weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support levels at $2.52 a share. One could also buy TNK off strength once it clears those breakout levels with volume and then simply use the same stop at around $2.52 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.