Wednesday, March 12, 2014

3 Stocks Under $10 Triggering Breakouts

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

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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.

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

Amarin (AMRN), a biopharmaceutical company, focuses on the development and commercialization therapeutic products for the treatment for cardiovascular diseases. This stock closed up 2.7% to $1.87 in Tuesday's trading session.

Tuesday's Range: $1.78-$1.89

52-Week Range: $1.36-$8.76

Tuesday's Volume: 2.26 million

Three-Month Average Volume: 5.67 million

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From a technical perspective, AMRN spiked higher here with lighter-than-average volume. This move briefly pushed shares of AMRN back above its 50-day moving average of $1.88 after the stock tagged an intraday high of $1.89. Shares of AMRN closed just below that level at $1.87, but well off its intraday low of $1.78. This spike on Tuesday is quickly pushing shares of AMRN within range of triggering a major breakout trade. That trade will hit if AMRN manages to take out some near-term overhead resistance levels at $1.92 to $1.97 with high volume.

Traders should now look for long-biased trades in AMRN as long as it's trending above some key near-term support levels at $1.68 or at $1.60 and then once it sustains a move or close above those breakout levels with volume that hits near or above 5.67 million shares. If breakout materializes soon, then AMRN will set up to re-fill some of its previous gap-down-day zone from January that started near $2.50.

Metabolix (MBLX) develops and commercializes technologies to produce renewable alternatives to petroleum-based products comprising advanced biopolymers, biobased industrial chemicals and bioenergy. This stock closed up 7.4% to $1.44 in Tuesday's trading session.

Tuesday's Range: $1.31-$1.48

52-Week Range: $0.75-$2.58

Tuesday's Volume: 230,000

Three-Month Average Volume: 135,717

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From a technical perspective, MBLX ripped higher here back above both its 200-day moving average of $1.34 and its 50-day moving average of $1.36 with above-average volume. This spike is quickly pushing shares of MBLX within range of triggering a big breakout trade. That trade will hit if MBLX manages to take out some near-term overhead resistance levels at $1.50 to $1.53 and then once it clears $1.58 with high volume.

Traders should now look for long-biased trades in MBLX as long as it's trending above some near-term support at $1.30 and then once it sustains a move or close above those breakout levels with volume that hits near or above 135,717 shares. If that breakout hits soon, then MBLX will set up to re-test or possibly take out its next major overhead resistance levels at $1.94 to $2.33.

Pozen (POZN), a pharmaceutical company, develops products for the treatment of acute and chronic pain, and pain related conditions in the U.S. This stock closed up 1.9% to $8.26 in Tuesday's trading session.

Tuesday's Range: $8.10-$8.29

52-Week Range: $4.26-$9.90

Tuesday's Volume: 508,000

Three-Month Average Volume: 338,493

From a technical perspective, POZN spike modestly higher here right off its 50-day moving average of $8.14 with above-average volume. This stock has been trending sideways and consolidating for the last month, with shares moving between $7.37 on the downside and $8.36 on the upside. This spike on Tuesday is starting to push shares of POZN within range of triggering a major breakout trade. That trade will hit if POZN manages to clear some near-term overhead resistance levels at $8.36 to $8.65 and then once it manages to take out more key overhead resistance at $8.99 with high volume.

Traders should now look for long-biased trades in POZN as long as it's trending above key near-term support levels at $7.85 to $7.71 or above $7.37 and then once it sustains a move or close above those breakout levels with volume that hits near or above 338,493 shares. If that breakout gets underway soon, then POZN will set up to re-test or possibly take out its next major overhead resistance levels at $10 to $12.

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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