Stock Quotes in this Article: OSIR, ASTX, DRD, ACW

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.

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Just take a look at some of the hot movers in the under-$10 complex from Wednesday, including SGOCO Group (SGOC), which skyrocketed by 56%; First Security Group (FSGI), which soared by 27.8%; SMART Technologies (SMT), which trended higher by 10.8%; and AVEO Pharmaceuticals (AVEO), which surged by 9.1%. You don't even have to catch the entire move in lower-priced stocks such as these to make outsized returns when trading.

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.

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.

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With that in mind, here's a look at several under-$10 stocks that look poised to potentially trade higher from current levels.

Astex Pharmaceuticals

One under-$10 stock that's setting up to break out here is Astex Pharmaceuticals (ASTX), which is dedicated to the discovery and development of novel small molecule therapeutics with a focus on oncology and hematology. This stock has been on fire during the last six months, with shares soaring higher by 38%.

This company received some bullish news this morning, when a case report published online by Pediatrics said patients in a trial of Astex's drug Dacogen achieved complete remission.

If you take a look at the chart for Astex Pharmaceuticals, you'll notice that this stock has uptrending modestly for the past two months, with shares moving higher from a low of $2.15 to its intraday high of $3.06 a share. During that uptrend, shares of ASTX have been mostly making higher lows and higher highs, which is bullish technical price action. That move has now pushed ASTX within range of triggering a near-term breakout trade.

Traders should now look for long-biased trades in ASTX if it manages to break out above some near-term overhead resistance levels at $3.03 to $3.20 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 523,056 shares. If that breakout hits soon, then ASTX will set up to re-test or possibly take out its next major overhead resistance levels at $3.40 to $3.49 a share.

Any move above $3.49 will then push ASTX into new 52-week high territory, which is bullish technical price action. Some possible upside targets off any run over $3.49 a share are $4 to $4.50 a share and possibly even $5 a share.

Traders can look to buy ASTX off any weakness as long as it's trending above some near-term support at its 50-day moving average of $2.60 a share. I would use a stop that sits just below that level. You can also buy off strength once ASTX takes out those breakout levels with volume and then simply use a stop that sits just below $2.88 a share.

Osiris Therapeutics

Another under-$10 stock that's trending within range of triggering a near-term breakout trade is Osiris Therapeutics (OSIR), which is focused on developing and marketing products to treat medical conditions in the inflammatory, orthopedic and cardiovascular areas. This stock has been a major winner so far in 2012, with shares up 80%.

If you take a look at the chart for Osiris Therapeutics, you'll notice that this stock has been uptrending modestly higher for the last month and change, with shares moving from a low of $8.05 to its recent high of $10.36 a share. During that uptrend, shares of OSIR have been mostly making higher lows and higher highs, which is bullish technical price action. Shares of OSIR have just recently started to challenge its 50-day moving average at $9.59 a share and its moving within range of triggering a near-term breakout trade.

Market players should now look for long-biased trades in OSIR once it breaks out above some near-term overhead resistance levels at $10 to $10.36 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 102,592 shares.

Traders can look to buy OSIR off any weakness as long as it's trending above some near-term support $9.02 a share. I would simply use a stop that sits just below that level if you buy off weakness. One can also buy off strength once OSIR clears those breakout levels with volume and then simply use a stop that sits just below its 50-day at $9.59 a share.

Accuride

One under-$10 name that's trending very close to triggering a major breakout trade is Accuride (ACW), which is s a manufacturers & suppliers of commercial vehicle components in North America. This stock has been hammered by the bears during the last six months, with shares down by 46%.

If you take a look at the chart for Accuride, you'll notice that this stock has been uptrending strongly for the last two months, with shares moving higher from a low of $2.21 to its recent high of $3.39 a share. During that uptrend, shares of ACW have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed ACW within range of triggering a major breakout trade.

Traders should now look for long-biased trades in ACW if it manages to break out above some near-term overhead resistance levels at $3.20 to $3.39 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 528,662 shares. If that breakout hits soon, then ACW will set up to re-test or possibly take out its next major overhead resistance levels at $4.50 to $5 a share. Any high-volume move above $5 would then put $5.27 to $5.45 into focus for shares of ACW.

Traders can look to buy ACW off any weakness and simply use a stop that sits just below its 50-day moving average of $2.78 a share. One could also buy ACW off strength once it clears those breakout levels with volume and then simply use a stop that sits just below $3 to $2.94 a share.

DRDGold

Another under-$10 name that's trending very close to triggering a major breakout trade is DRDGold (DRD), which is engaged in the exploration, extraction, processing, and smelting of gold in South Africa. This stock has been trending bullishly for the last six months, with shares up 16%.

If you take a look at the chart for DRDGold, you'll notice that this stock has been uptrending strongly for the last four months, with shares soaring from a low of $5.35 to its recent high of $7.89 a share. During that uptrend, shares of DRD have been mostly making higher lows and higher highs, which is bullish technical price action. Also during that run, the upside volume for DRD have been tracking in bullish. Shares of DRD are now starting to bounce right off its 50-day moving average of $7.30 a share and it's quickly moving within range of triggering a major breakout trade.

Market players should now look for long-biased trades in DRD if it manages to break out above some near-term overhead resistance levels at $7.62 to $7.89 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 55,605 shares. If that breakout triggers soon, then this stock will set up to re-test or possibly take out its 52-week high of $8.16 a share. Some possible upside targets off any move into new 52-week high territory above $8.16 a share are $9 to $10 a share.

Traders can look to buy DRD off any weakness and then simply use a stop that sits right around its 50-day at $7.30 or right near its next major support level at $7.10 a share. One could also buy DRD off strength once it takes out those breakout levels with volume and then simply use a stop that sits just below its 50-day at $7.30 a share.

Envivio

One final under-$10 name that's trending very close to triggering a near-term breakout trade is Envivio (ENVI), which is a provider of IP video processing and distribution solutions that enable the delivery of high-quality video to consumers. This stock has been hit hard by the bears in 2012, with shares off by a whopping 80%.

If you take a look at the chart for Envivio, you'll notice that this stock has been trending sideways for the last two months, with shares moving between $1.42 on the downside and $1.89 on the upside. Shares of ENVI are now starting to bounce off some near-term support at $1.59 a share and it's quickly moving within range of breaking out above the upper-end of its recent range. Any high-volume move outside of its sideways trading pattern will likely lead to the next major trend for shares of ENVI.

Traders should now look for long-biased trades in ENVI if it manages to break out above its 50-day at $1.82 a share and then once it clears more overhead resistance levels at $1.87 to $1.89 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 102.500 shares. If that breakout hits soon, then ENVI will set up to re-test or possibly take out its next major overhead resistance levels at $2.29 to $2.43 a share. Any high-volume move above those levels will then put $2.75 to $3 a share into focus for shares of ENVI.

This stock has a huge gap that could get filled if it were to ever take out $3 a share, since ENVI plunged and gapped down back in August from $6 to below $2.50 a share with huge downside volume.

Traders can look to buy ENVI off any weakness and simply use a stop that sits right below some near-term support levels at $1.57 to $1.50 a share. One could also buy ENVI off strength once it clears those breakout levels with volume and then simply use a stop that sits right around $1.59 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.