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.
Aeropostale (ARO - Get Report), together with its subsidiaries, operates as a mall-based specialty retailer of casual apparel and accessories. This stock closed up 3.9% to $4.96 in Tuesday's trading session.
Tuesday's Range: $4.78-$5.03
52-Week Range: $4.30-$17.10
Tuesday's Volume: 2.58 million
Three-Month Average Volume: 4.15 million
From a technical perspective, ARO spiked sharply higher here and broke out above some near-term overhead resistance at $5 with lighter-than-average volume. Shares of ARO tagged an intraday high of $5.03, before the stock closed just below that level at $4.96. The near-term trend for ARO looks to be reversing into an uptrend from its more prolonged downtrend that the stock was stuck in over the last six months. Market players should now look for a continuation move to the upside in the short-term if ARO manages to take out Tuesday's high of $5.03 with strong volume.
Traders should now look for long-biased trades in ARO as long as it's trending above some near-term support at $4.61 and then once it sustains a move or close above $5.03 with volume that hits near or above 4.15 million shares. If that move gets underway soon, then ARO will set up to re-test or possibly take out its next major overhead resistance levels at $5.43 to its 50-day moving average of $5.80. Any high-volume move above those levels will then give ARO a chance to tag $6.50.