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2 Basic Materials Stocks Under $10 to Watch - views
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 today.
BioFuel Energy (BIOF) is engaged in the production and sale of ethanol and its co-products through its two ethanol production facilities located in Nebraska and Minnesota. This stock closed up 9.4% to $4.04 in Tuesday's trading session.
Tuesday's Range: $3.69-$4.04
52-Week Range: $2.70-$10.75
Tuesday's Volume: 152,000
Three-Month Average Volume: 57,949
From a technical perspective, BIOF soared higher here back above its 50-day moving average of $3.76 with above-average volume. This move is quickly pushing shares of BIOF within range of triggering a major breakout trade. That trade will hit if BIOF manages to take out some near-term overhead resistance levels at $3.99 to $4.12 with high volume. At last check, BIOF hit an intraday high of $4.04 and volume was well above its three-month average action of 57,949 shares.
Traders should now look for long-biased trades in BIOF as long as it's trending above its 50-day at $3.76 or above more near-term support at $3.50 and then once it sustains a move or close above those breakout levels with volume that hits near or above 57,949 shares. If that breakout hits soon, then BIOF will set up to re-test or possibly take out its next major overhead resistance levels at its 200-day of $4.63 to $5.19. Any high-volume move above $5.19 will then put $5.50 to $6 within range for shares of BIOF.
North American Palladium
North American Palladium (PAL) is a precious metals producer that operates Lac des Iles mine in Ontario, Canada. This stock closed up 2.5% to $1.19 in Tuesday's trading session.
Tuesday's Range: $1.14-$1.19
52-Week Range: $0.91-$2.28
Thursday's Volume: 2.16 million
Three-Month Average Volume: 1.71 million
From a technical perspective, PAL trended modestly higher here right above its 50-day moving average at $1.09 with above-average volume. This stock recently came out of a bad downtrend, which took shares from its high of $1.78 to its recent low of 91 cents per share. After tagging that low at 91 cents, shares of PAL saw its downside volatility stop and the stock has reversed course and entered an uptrend. That uptrend has taken PAL from 91 cents to its recent high of $1.20. Shares of PAL are now quickly moving within range of triggering a major breakout trade. That trade will hit if PAL manages to take out some near-term overhead resistance levels at $1.20 to $1.34 with high volume.
Traders should now look for long-biased trades in PAL as long as it's trending above its 50-day at $1.09 or above more support at $1 and then once it sustains a move or close above those breakout levels with volume that hits near or above 1.71 million shares. If that breakout triggers soon, then PAL will set up to re-test or possibly take out its next major overhead resistance levels at $1.45 to $1.70.
To see more stocks that are making notable moves higher today, check out the Stocks Under $10 Moving Higher portfolio on Stockpickr.
-- Written by Roberto Pedone in Delafield, Wis.
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.