Sunday, April 6, 2014

5 Stocks Under $10 in Breakout Territory

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

>>5 Breakout Trades Under $10

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 With Big Insider Buying

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.

Cenveo

Cenveo (CVO) provides an array of print and related solutions in the areas of envelops, custom labels, specialty packaging and business documents, among others. This stock closed up 4.6% to $3.16 a share in Thursday's trading session.

Thursday's Range: $2.87-$3.16

52-Week Range: $1.85-$3.22

Thursday's Volume: 3.70 million

Three-Month Average Volume: 634,385

From a technical perspective, CVO spiked sharply higher here right off its 50-day moving average of $2.95 with heavy upside volume. This stock has been uptrending for the last month and change, with shares moving higher from its low of $2.69 to its recent high of $3.22. During that uptrend, shares of CVO have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of CVO within range of triggering a big breakout trade. That trade will hit if CVO manages to take out some near-term overhead resistance at $3.20 to its 52-week high at $3.22 with high volume.

Traders should now look for long-biased trades in CVO as long as it's trending above Thursday's low of $2.87 or above more support at $2.80 and then once it sustains a move or close above those breakout levels with volume that hits near or above 634,385 shares. If that breakout hits soon, then CVO will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are $3.50 to $4.

Arca Biopharma

Arca Biopharma (ABIO) is a biopharmaceutical company developing genetically targeted therapies for cardiovascular diseases. This stock closed up 14.2% to $1.60 in Thursday's trading session.

Thursday's Range: $1.40-$1.60

52-Week Range: $1.13-$5.94

Thursday's Volume: 3.27 million

Three-Month Average Volume: 669,132

From a technical perspective, ABIO exploded higher here back above its 50-day moving average of $1.47 with monster upside volume. This move is quickly pushing shares of ABIO within range of triggering a major breakout trade. That trade will hit if ABIO manages to take out some near-term overhead resistance levels at $1.63 to $1.70, and then once it takes out more resistance at $1.76 with high volume.

Traders should now look for long-biased trades in ABIO as long as it's trending above its 50-day at $1.47 or above more support at $1.30 and then once it sustains a move or close above those breakout levels with volume that hits near or above 669,132 shares. If that breakout triggers soon, then ABIO will set up to re-fill some of its previous gap down zone from May that started near $2.80 a share.

Accretive Health

Accretive Health (AH) is a provider of services to the health care providers. This stock closed up 1.6% to $8.69 in Thursday's trading session.

Thursday's Range: $8.54-$8.81

52-Week Range: $8.03-$13.54

Thursday's Volume: 809,000

Three-Month Average Volume: 335,380

From a technical perspective, shares of AH spiked modestly higher here with above-average volume. This stock has been downtrending badly for the last six months, with shares sliding lower from over $11 to its recent low of $8.03. During that downtrend, shares of AH have been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of AH have now started to rebound off that $8.03 low and it's quickly moving within range of triggering a near-term breakout trade. That trade will hit if AH manages to take out some near-term overhead resistance levels at its 50-day moving average of $8.93 to more resistance at $9.06 with high volume.

Traders should now look for long-biased trades in AH as long as it's trending above that recent low of $8.03 and then once it sustains a move or close above those breakout levels with volume that hits near or above 335,380 shares. If that breakout hits soon, then AH will set up to re-test or possibly take out its next major overhead resistance levels at $10.06 to $10.20, or even $11.

ENGlobal

ENGlobal (ENG) is a provider of engineering and other professional project services related to design, fabrication, procurement, maintenance, environmental and other governmental compliance and construction management. This stock closed up 5.3% to $1.37 in Thursday's trading session.

Thursday's Range: $1.32-$1.38

52-Week Range: $0.30-$1.54

Thursday's Volume: 50,000

Three-Month Average Volume: 50,134

From a technical perspective, ENG ripped higher here and broke out above some near-term overhead resistance at $1.35 with decent upside volume. This move is quickly pushing shares of ENG within range of triggering another big breakout trade. That trade will hit if ENG manages to take out Thursday's high of $1.38 to its 52-week high at $1.54 with high volume.

Traders should now look for long-biased trades in ENG as long as it's trending above some near-term support at $1.20 and then once it sustains a move or close above those breakout levels with volume that hits near or above 50,134 shares. If that breakout hits soon, then ENG will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are its next major overhead resistance levels at $1.76 to $2, or even $2.20.

Two Harbors Investment

Two Harbors Investment (TWO) is a Maryland corporation formed to invest primarily in residential mortgage-backed securities. This stock closed up 1.8% to $9.64 in Thursday's trading session.

Thursday's Range: $9.49-$9.65

52-Week Range: $8.95-$13.05

Thursday's Volume: 5.50 million

Three-Month Average Volume: 4.96 million

From a technical perspective, TWO trended modestly higher here back above its 50-day moving average of $9.52 with above-average volume. This move is starting to push shares of TWO within range of triggering a near-term breakout trade. That trade will hit if TWO manages to take out some near-term overhead resistance levels at $9.89 to $9.94, and then once it takes out its 200-day at $10.29 with high volume.

Traders should now look for long-biased trades in TWO as long as it's trending above support at $9.15 and then once it sustains a move or close above those breakout levels with volume that hits near or above 4.96 million shares. If that breakout hits soon, then TWO will set up to re-test or possibly take out its next major overhead resistance levels at $11.50 to $12.

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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