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.
DragonWave (DRWI) provides high-capacity packet microwave solutions that drive IP networks worldwide. This stock closed up 4.5% to $1.37 a share in Tuesday's trading session.
Tuesday's Range: $1.31-$1.38
52-Week Range: $1.08-$3.58
Tuesday's Volume: 139,000
Three-Month Average Volume: 252,143
From a technical perspective, DRWI spiked sharply higher here right above some near-term support at $1.28 with lighter-than-average volume. This spike higher on Tuesday is starting to push shares of DRWI within range of triggering a near-term breakout trade. That trade will hit if DRWI manages to take out its 50-day moving average of $1.40 and then once it clears more near-term overhead resistance levels at $1.44 to $1.50 with high volume.
Traders should now look for long-biased trades in DRWI as long as it's trending above some key near-term support levels at $1.28 or at $1.22 and then once it sustains a move or close above those breakout levels with volume that hits near or above 252,143 shares. If that breakout kicks off soon, then DRWI will set up to re-test or possibly take out its next major overhead resistance levels $1.69 to its 200-day moving average of $1.78.