Wednesday, June 4, 2014

5 Stocks Under $10 to Trade for Breakouts

DELAFIELD, Wis. (Stockpickr) -- At Stockpickr, we track daily portfolios of stocks that are the biggest percentage gainers and the biggest percentage losers.

>>5 Big Stocks to Trade for Gains

Stocks that are making large moves like these are favorites among short-term traders because they can jump into these names and try to capture some of that massive volatility. Stocks that are making big-percentage moves either up or down are usually in play because their sector is becoming attractive or they have a major fundamental catalyst such as a recent earnings release. Sometimes stocks making big moves have been hit with an analyst upgrade or an analyst downgrade.

Regardless of the reason behind it, when a stock makes a large-percentage move, it is often just the start of a new major trend -- a trend that can lead to huge profits. If you time your trade correctly, combining technical indicators with fundamental trends, discipline and sound money management, you will be well on your way to investment success.

>>5 Stocks Insiders Love Right Now

With that in mind, let's take a closer look at a several stocks under $10 that are making large moves to the upside today.

Cott

Cott (COT) is a beverage company engaged in production of beverages on behalf of retailers and distributors. This stock closed up 3% to $8.20 in Thursday's trading session.

Thursday's Range: $7.96-$8.29

52-Week Range: $7.24-$11.25

Thursday's Volume: 1.13 million

Three-Month Average Volume: 364,252

From a technical perspective, COT jumped higher here right off its 50-day moving average of $7.94 with heavy upside volume. This move is quickly pushing shares of COT within range of triggering a near-term breakout trade. That trade will hit if COT manages to take out some near-term overhead resistance at $8.29 with high volume.

Traders should now look for long-biased trades in COT as long as it's trending above its 50-day at $7.94 or above more support at $7.80 and then once it sustains a move or close above $8.29 with volume that hits near or above 364,252 shares. If that breakout hits soon, then COT will set up to re-test or possibly take out its next major overhead resistance levels at $8.74 to $8.84. Any high-volume move above those levels will then give COT a chance to tag its next major overhead resistance levels at $9.25 to $10.

GigOptix

GigOptix (GIG) is a fabless supplier of semiconductor components that enable high speed information streaming over network infrastructures. This stock closed up 2.9% to $1.42 in Thursday's trading session.

Thursday's Range: $1.36-$1.45

52-Week Range: $0.83-$2.17

Thursday's Volume: 46,000

Three-Month Average Volume: 76,148

From a technical perspective, GIG trended modestly higher here right above some near-term support at $1.35 with lighter-than-average volume. This stock has been uptrending strong for the last two months, with shares soaring higher from its low of 90 cents per share to its recent high of $1.54. During that uptrend, shares of GIG have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of GIG within range of triggering a big breakout trade. That trade will hit if GIG manages to take out some key overhead resistance levels at $1.54 to $1.60 with high volume.

Traders should now look for long-biased trades in GIG as long as it's trending above its 200-day at $1.24 or above more support at $1.22 and then once it sustains a move or close above those breakout levels with volume that hits near or above 76,148 shares. If that breakout triggers soon, then GIG will set up to re-test or possibly take out its next major overhead resistance levels at $1.88 to $2.10.

Hackett Group

Hackett Group (HCKT) provides advisory, benchmarking and transformation consulting services including shares services, offshoring and outsourcing advice. This stock closed up 1.7% to $7.12 a share in Thursday's trading session.

Thursday's Range: $6.85-$7.20

52-Week Range: $3.20-$7.48

Thursday's Volume: 316,000

Three-Month Average Volume: 165,538

From a technical perspective, HCKT trended modestly higher here right above its 50-day moving average of $6.77 with above-average volume. This stock has been trending sideways and consolidating for the last month, with shares moving between $6.81 on the downside and $7.48 on the upside. This bounce is now quickly pushing shares of HCKT within range of triggering a breakout trade above the upper-end of its recent range. That breakout will hit if HCKT manages to take out some near-term overhead resistance levels at $7.25 to its 52-week high at $7.48 with high volume.

Traders should now look for long-biased trades in HCKT as long as it's trending above its 50-day at $6.77 or above more support at $6.50 and then once it sustains a move or close above those breakout levels with volume that hits near or above 165,538 shares. If that breakout hits soon, then HCKT will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are $9 to $10.

China Cord Blood

China Cord Blood (CO) provides cord blood processing and storage services for expectant parents interested in capturing the opportunities made available by evolving medical treatments. This stock closed up 4.2% to $4.15 in Thursday's trading session.

Thursday's Range: $3.93-$4.17

52-Week Range: $2.54-$4.60

Thursday's Volume: 135,000

Three-Month Average Volume: 167,134

From a technical perspective, CO jumped higher here right above its 50-day moving average of $3.85 with decent upside volume. This move is quickly pushing shares of CO within range of triggering a major breakout trade. That trade will hit if CO manages to take out some near-term overhead resistance levels at $4.20 to $4.46 and then once it clears its 52-week high at $4.60 with high volume.

Traders should now look for long-biased trades in CO as long as it's trending above its 50-day at $3.85 or above more support at $3.75 and then once it sustains a move or close above those breakout levels with volume that hits near or above 167,134 shares. If that breakout hits soon, then CO will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $6 to $6.50.

IGI Laboratories

IGI Laboratories (IG) sells generic topical pharmaceutical products that are bioequivalent to their brand-name counterparts. This stock closed up 7.8% to $2.19 in Thursday's trading session.

Thursday's Range: $1.96-$2.19

52-Week Range: $0.98-$2.28

Thursday's Volume: 255,000

Three-Month Average Volume: 73,486

From a technical perspective, IG exploded higher here right off its 50-day moving average of $1.94 with above-average volume. This move pushed shares of IG into breakout territory, since the stock took out some near-term overhead resistance at $2.09. Shares of IG are now quickly moving within range of triggering another big breakout trade. That trade will hit if IG manages to take out Thursday's high of $2.19 to its 52-week high at $2.28 with high volume.
Traders should now look for long-biased trades in IG as long as it's trending above its 50-day at $1.94 or above more near-term support at $1.80 and then once it sustains a move or close above those breakout levels with volume that hits near or above 73,486 shares. If that breakout triggers soon, then IG will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are $3 to $3.50.

To see more stocks that are making notable moves higher today, check out the Stocks Under $10 Moving Higher 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.


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