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.
Highway Holdings (HIHO), through its subsidiaries, manufactures and sells metal, plastic, electric and electronic components, subassemblies and finished products for original equipment manufacturers and contract manufacturers. This stock is trading up 4% to $3.07 in Tuesday's trading session.
Tuesday's Range: $2.97-$3.12
52-Week Range: $1.65-$5.08
Tuesday's Volume: 62,000
Three-Month Average Volume: 81,076
From a technical perspective, HIHO is ripping higher here right off its 50-day moving average of $2.95 with decent upside volume flows. This move is quickly pushing shares of HIHO within range of triggering a major breakout trade. That trade will hit if HIHO manages to take out some near-term overhead resistance levels at $3.37 to $3.40 and then $3.55 with high volume.
Traders should now look for long-biased trades in HIHO as long as it's trending above its 50-day at $2.95 or above more near-term support levels at $2.75 to $2.50 and then once it sustains a move or close above those breakout levels with volume that hits near or above 81,076 shares. If that breakout hits soon, then HIHO will set up to re-test or possibly take out its next major overhead resistance levels at its 52-week high of $5.08.