DELAFIELD, Wis. (Stockpickr) -- A smart trader keeps a close eye on unusual upside volume in stocks -- and unusual volume in a stock that trades below $10 should really make you sit up and pay attention.
Stocks that trade below $10 a share can make big moves to the upside very quickly, and short-term traders can try to capture some of that massive volatility. 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 sharp moves higher with unusual upside volume flows.
Tuesday's Range: $2.61-$2.94
52-Week Range: $1.25-$3.06
Tuesdays Volume: 583,000
Three-Month Average Volume: 327,968
From a technical perspective, CIDM is moving higher here with above-average volume. This stock has been uptrending strong for the last four months and change, with shares moving higher from its low of $1.48 to its recent high of $3.06. During that uptrend, shares of CIDM have been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of CIDM within range of triggering a near-term breakout trade. That trade will hit if CIDM manages to take out some near-term overhead resistance levels at $3 to its 52-week high at $3.06 with high volume.
Traders should now look for long-biased trades in CIDM as long as it's trending above Tuesday's low of $2.60 or above its 50-day at $2.36 and then once it sustains a move or close above those breakout levels with volume that hits near or above 327,968 shares. If that breakout hits soon, then CIDM will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are $4 to $4.50.
Bona Film Group
Bona Film Group (BONA)
Tuesday's Range: $6.30-$6.50
52-Week Range: $3.58-$7.77
Tuesday's Volume: 295,000
Three-Month Average Volume: 231,998
From a technical perspective, BONA is trending modestly higher here right above its 50-day moving average of $5.96 with above-average volume. This stock has been trending sideways and consolidating for the last three months and change, with shares moving between $5.20 on the downside and $6.92 on the upside. Shares of BONA are now quickly moving within range of triggering a big breakout trade above the upper-end of its recent sideways trading chart pattern. That trade will hit if BONA manages to take out some near-term overhead resistance levels at $6.75 to $6.92 with high volume.
Traders should now look for long-biased trades in BONA as long as it's trending above its 50-day at $5.96 and then once it sustains a move or close above those breakout levels with volume that hits near or above 231,998 shares. If that breakout hits soon, then BONA will set up to re-test or possibly take out its next major overhead resistance level at its 52-week high of $7.77.
Crumbs Bake Shop
Crumb Bake Shop (CRMB)
Tuesday's Range: $0.70-$0.76
52-Week Range: $0.56-$3.01
Tuesday's Volume: 235,000
Three-Month Average Volume: 194,426
From a technical perspective, CRMB is ripping higher here back above its 50-day moving average of 72 cents per share with above-average volume. This move has also started to push shares of CRMB into breakout territory, since the stock is beginning to take out some near-term overhead resistance at 75 cents per share. Market players should look for a continuation move higher in the short-term if CRMB manages to take out Tuesday's high of 76 cents per share with strong volume.
Traders should now look for long-biased trades in CRMB as long as its trending above its 50-day at 72 cents per share or above more near-term support at 65 cents per share and then once it sustains a move or close above 76 cents per share with volume that hits near or above 194,426 shares. If we get that move soon, then CRMB will set up to re-test or possibly take out its next major overhead resistance levels at 90 cents to its 200-day moving average of $1.05.
To see more stocks under $10 that are making notable moves higher with volume, check out the Stocks Under $10 Spiking Higher With Unusual Volume 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.