Sunday, October 12, 2014

3 Under-$10 Stocks Moving Higher Into Breakout Territory

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

Must Read: Warren Buffett's Top 10 Dividend Stocks

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.

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

Must Read: 10 Stocks George Soros Is Buying

Frontline

Frontline (FRO), through its subsidiaries, is engaged in the ownership and operation of oil tankers and oil/bulk/ore carriers. This stock closed up 5% to $1.45 in Thursday's trading session.

Thursday's Range: $1.39-$1.48

52-Week Range: $1.18-$5.18

Thursday's Volume: 895,000

Three-Month Average Volume: 881,852

From a technical perspective, FRO ripped higher here right above some near-term support at $1.28 with above-average volume. This spike to the upside on Thursday is starting to push shares of FRO within range of triggering a big breakout trade. That trade will hit if FRO manages to take out some key near-term overhead resistance levels at $1.49 to $1.61 with high volume.

Traders should now look for long-biased trades in FRO as long as it's trending above Thursday's intraday low of $1.39 or above more near-term support at $1.28 and then once it sustains a move or close above those breakout levels with volume that hits near or above 881,852 shares. If that breakout hits soon, then FRO will set up to re-test or possibly take out its next major overhead resistance levels at its 50-day moving average of $1.89 to $2. Any high-volume move above $2 will then give FRO a chance to make a run at $2.50.

Must Read: Must-See Charts: 5 Big Stocks to Trade for Big Gains

Full House Resorts

Full House Resorts (FLL) owns, develops, manages and invests in gaming-related enterprises. This stock closed up 3.3% to $1.23 a share in Thursday's trading session.

Thursday's Range: $1.21-$1.25

52-Week Range: $0.87-$3.03

Thursday's Volume: 55,000

Three-Month Average Volume: 39,880

From a technical perspective, FLL ripped higher here and broke out above some near-term overhead resistance at $1.20 with above-average volume. This stock recently pulled back from $1.35 to just under its 50-day moving average to its low of $1.05. Following that move, shares of FLL have now started to rebound and move back above its 50-day moving average at $1.08. This spike to the upside on Thursday is now starting to push shares of FLL within range of triggering a big breakout trade. That trade will hit if FLL manages to take out Thursday's intraday high of $1.26 to some more key overhead resistance at $1.35 with high volume.

Traders should now look for long-biased trades in FLL as long as it's trending above $1.20 or above its 50-day at $1.08 and then once it sustains a move or close above those breakout levels with volume that hits near or above 39,880 shares. If that breakout materializes soon, then FLL will set up to re-test or possibly take out its next major overhead resistance levels at $1.50 to $1.60, or even its 200-day moving average of $1.79.

Must Read: 7 Stocks Warren Buffett Is Selling in 2014

Sharps Compliance

Sharps Compliance (SMED) provides management solutions and services for medical waste, used health care materials and patient-dispensed unused or expired medications in the U.S. This stock closed up 3.6% to $4.50 a share in Thursday's trading session.

Thursday's Range: $4.36-$4.60

52-Week Range: $2.80-$5.90

Thursday's Volume: 185,000

Three-Month Average Volume: 32,457

From a technical perspective, SMED jumped notably higher here back above both its 50-day and 200-day moving averages at $4.50 with above-average volume. This spike to the upside on Thursday also pushed shares of SMED into breakout territory, since the stock took out some near-term overhead resistance at $4.55. Market players should now look for a continuation move higher on the short-term if SMED manages to take out Thursday's intraday high of $4.60 with high volume.

Traders should now look for long-biased trades in SMED as long as it's trending above Thursday's intraday low of $4.36 or above more near-term support at $4.13 and then once it sustains a move or close above Thursday's intraday high of $4.60 with volume that hits near or above 32,457 shares. If that move kicks off soon, then SMED will set up to re-test or possibly take out its next major overhead resistance levels at $4.90 to $5, or even $5.40 to its 52-week high at $5.90.

Must Read: 10 Stocks Billionaire John Paulson Loves in 2014

To see more stocks that are making notable moves higher, 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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