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.
TearLab (TEAR) operates as an ophthalmic device company in the U.S. This stock closed up 10.9% to $4.37 in Tuesday's trading session.
Tuesday's Range: $3.96-$4.38
52-Week Range: $3.80-$15.18
Tuesday's Volume: 751,000
Three-Month Average Volume: 427,577
From a technical perspective, TEAR exploded higher here right above its recent 52-week low of $3.80 with above-average volume. This stock has been downtrending badly for the last two months and change, with shares moving lower from its high of $8.28 to its low of $3.80. During that move, shares of TEAR have been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of TEAR are now starting to spike higher off oversold levels and it's starting to enter breakout territory above some near-term overhead resistance at $4.36. Market players should now look for a continuation move to the upside in the short-term if TEAR manages to clear Tuesday's high of $4.38 to $4.50 with high volume.
Traders should now look for long-biased trades in TEAR as long as it's trending above $4 and then once it sustains a move or close above $4.38 to $4.50 with volume that hits near or above 427,577 shares. If that move gets started soon, then TEAR will set up to re-test or possibly take out its next major overhead resistance levels at $5 to $5.36, or even its 50-day moving average of $5.99.