11/01/2014

4 Stocks Under $10 Triggering Breakout Trades

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.

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Eagle Rock Energy Partners

Eagle Rock Energy Partners (EROC), together with its subsidiaries, develops and produces oil and natural gas property interests. This stock closed up 3.9% to $3.44 in Thursday's trading session.

Thursday's Range: $3.33-$3.50

52-Week Range: $2.64-$6.75

Thursday's Volume: 1.32 million

Three-Month Average Volume: 668,254

From a technical perspective, EROC jumped higher here right above some near-term support at $3.20 with strong upside volume. This stock has been uptrending for the last few weeks, with shares moving higher from its low of $2.64 to its recent high of $3.60. During that move, shares of EROC have been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of EROC within range of triggering a near-term breakout trade. That trade will hit if EROC manages to take out some key near-term overhead resistance levels at $3.60 to its 50-day moving average at $3.68 and then above $3.80 to $3.92 with high volume.

Traders should now look for long-biased trades in EROC as long as it's trending above some near-term support at $3.20 and then once it sustains a move or close above those breakout levels with volume that hits near or above 668,254 shares. If that breakout triggers soon, then EROC will set up to re-test or possibly take out its next major overhead resistance levels at $4.50 to its 200-day moving average of $4.54, or even $5.

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Rada Electronic Industries

Rada Electronic Industries (RADA), a defense electronics contractor, is engaged in the development, manufacture and sale of defense electronics to various air forces and companies worldwide. This stock closed up 11.4% to $2.43 in Thursday's trading session.

Thursday's Range: $2.13-$2.44

52-Week Range: $1.26-$6.29

Thursday's Volume: 481,000

Three-Month Average Volume: 2.20 million

From a technical perspective, RADA exploded higher here right above some near-term support at $2.04 with lighter-than-average volume. This strong move to the upside on Thursday is now quickly pushing shares of RADA within range of triggering a big breakout trade. That trade will hit if RADA manages to take out its 50-day moving average of $2.44 and then once it clears more near-term overhead resistance at $2.65 with high volume.

Traders should now look for long-biased trades in RADA as long as it's trending above Thursday's intraday low $2.13 or above more near-term support at $2.04 and then once it sustains a move or close above those breakout levels with volume that hits near or above 2.20 million shares. If that breakout hits soon, then RADA will set up to re-test or possibly take out its next major overhead resistance levels at $3.30 to $4.

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TravelCenters of America

TravelCenters of America (TA) operates and franchises travel centers primarily along the U.S. interstate highway system. This stock closed up 1.1% to $9.45 in Thursday's trading session.

Thursday's Range: $9.19-$9.45

52-Week Range: $7.18-$11.85

Thursday's Volume: 135,000

Three-Month Average Volume: 347,911

From a technical perspective, TA trended modestly higher here right above some near-term support at $8.82 and above its 200-day moving average of $8.70 with lighter-than-average volume. This stock has been uptrending a bit for the last few weeks, with shares moving higher from its low of $8.36 to its recent high of $9.62. During that move, shares of TA have been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of TA within range of triggering a near-term breakout trade. That trade will hit if TA manages to take out some key near-term overhead resistance levels at $9.51 to $9.62 with high volume.

Traders should now look for long-biased trades in TA as long as it's trending above $9 or above more near-term support levels at $8.82 to its 200-day at $8.70 and then once it takes out those breakout levels with volume that hits near or above 347,911 shares. If that breakout kicks off soon, then TA will set up to re-test or possibly take out its next major overhead resistance levels at its 50-day moving average of $10.22 to $10.75. Any high-volume move above $10.75 will then give TA a chance to re-fill some of its previous gap-down-day zone from late September that started at $11.69.

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Vapor

Vapor (VPCO) designs, markets and distributes electronic cigarettes, vaporizers, e-liquids and accessories primarily in the U.S. and Canada. This stock closed up 5% to $2.09 in Thursday's trading session.

Thursday's Range: $1.95-$2.18

52-Week Range: $1.02-$10.00

Thursday's Volume: 501,000

Three-Month Average Volume: 446,529

From a technical perspective, VPCO spiked sharply higher here right above its 50-day moving average of $1.74 with above-average volume. This jump to the upside on Thursday is starting to push shares of VPCO within range of triggering a big breakout trade. That trade will hit if VPCO manages to take out some key near-term overhead resistance levels at Thursday's intraday high of $2.18 to $2.50 and then above more resistance at $2.63 to $2.88 with high volume.

Traders should now look for long-biased trades in VPCO as long as it's trending above Thursday's intraday low of $1.95 or above its 50-day at $1.74 and then once it sustains a move or close above those breakout levels with volume that hits near or above 446,529 shares. If that breakout develops soon, then VPCO will set up to re-test or possibly take out its next major overhead level near $4.

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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