Small-Cap Charts Go Wild

Low floats also make these stocks prone to manipulation by unscrupulous traders looking for large price swings in either direction. In fact, one securities industry source called the surge in daily trading in these no-name stocks "highly suspicious" and possibly indicative of a coordinated strategy.

The Securities and Exchange Commission had no comment on the activity. A spokesman for the Nasdaq Stock Market also had no comment. But officials at several of the companies said Nasdaq officials had made inquiries about the trading activity.

"I've been in touch with Nasdaq every day," said Harry Kletter, the chairman and chief executive of Industrial Services. "I say, 'Is there anything we are supposed to do differently?' And they say, 'No.'"

Professional traders said stocks with low float are fraught with peril because they can easily fall just as fast as they rise. And a small float can make it difficult for an investor needing to sell shares quickly.

On the way down, a low float stock is like a hot potato that no one wants to be left holding.

On Tuesday, the party appeared to be over for at least a few low-float stocks that have posted some huge gains. Shares of Cost-U-Less(CULS Quote), a discount warehouse store, fell 52 cents, or 8.5%, to $5.60, after nearly doubling in price this year. Shares of Castelle(CSTL Quote) fell 76 cents, or 12%, to $5.35.

"Playing these low floaters is like a game of musical chairs," said Hal Uy, a trader and contributor to RealMoney.com, the sister site of TheStreet.com. Uy briefly shorted shares of Unifab on Monday. "We all know how it eventually ends."

But, for now, it appears many traders and investors aren't ready to throw in the towel.

Tuesday's highflying stock of the day was Mamma.com(MAMA Quote), an obscure Internet search engine that saw its shares rise just over $6.30 to $10.36, a 155% one-day jump. Trading was very heavy in Mama's shares, with some 60 million shares changing hands. The stock's float of 6 million shares makes it a veritable behemoth compared with some of the other names surging lately.

But at least Mamma had some news to propel its frenzied trading. The company reported better-than-expected fourth-quarter earnings of $85,000, or 1 cent a share, as it swung to a profit, compared with a year-ago loss.

On Air Five stocks with eye-popping returns
Stock	Price	%Gain YTD
Vaso Active	$36.61	500
Industrial Services of America	40.40	828
Unifab International	10.25	900
Mamma.com	10.10	212
Cost-U-Less	5.58	86
Source: Yahoo finance.