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.
ReachLocal (RLOC) provides a suite of online marketing and reporting solutions to small and medium-sized businesses. This stock closed up 2.9 % to $7.04 in Thursday's trading session.
Thursday's Range: $6.76-$7.06
52-Week Range: $5.87-$14.45
Thursday's Volume: 118,000
Three-Month Average Volume: 150,905
From a technical perspective, RLOC spiked notably higher here and broke out above some key overhead resistance levels at $6.87 to $6.90 with lighter-than-average volume. This breakout is significant, since shares of RLOC have been tapping up against those resistance levels and failing for the last two months. Market players should now look for a continuation move higher in the short-term if RLOC manages to clear Thursday's intraday high of $7.06 with high volume.
Traders should now look for long-biased trades in RLOC as long as it's trending above Thursday's low of $6.76 or above more support levels around $6.50 to $6.30 and then once it sustains a move or close above $7.06 with volume that hits near or above 150,905 shares. If that move begins soon, then RLOC will set up to re-test or possibly take out its next major overhead resistance levels at its 50-day moving average of $7.96 to its gap-down-day high from May near $8.50. Any high-volume move above $8.50 will then give RLOC a chance to re-fill some of its previous gap-down-day zone that started near $10.50.