Cliffs Natural Resources: Why Deutsche Bank Cut Its Rating

After yesterday’s announcement that Cliffs Natural Resources (CLF) would look to exit its Bloom Lake project, Deutsche Bank’s Jorge Beristain and team slashed their rating on the struggling iron miner to Hold from Buy. They explain why:

Agence France-Presse/Getty Images

Stripping out [Eastern Canada iron ore] operations from 1Q15 onwards, lowers Deustche Bank’s estimated EBITDA by an average of 5% over the next 3 years to ~$650m/yr, while reduced depreciation & amortization increases EPS. Incorporating estimated related closure costs of $700m (assuming $150m/yr in first three years and $125m/yr in following two) and
$71m legal loss in 1Q15, [net-present value, or] NPV declines $4/sh to $12/sh. However, we note some potential NPV offsets (not yet considered) include reduced maintenance capex and SG&A costs reduce could provide ~$1/sh tailwind. Should Cliffs be in a position to forego remaining $750m tailings dam capex, NPV could increase a further ~$3/sh…

Cliffs' price target of $10 [down from $17. Ed.] is now based on 0.85x (from prior ~1.0x) our revised NPV of ~$12 ($16), calculated under a  discounted cash-flow methodology. Increased net-debt-to-EBITDA is becoming a source concern and reason for applying 15% discount to NPV. Risks include higher-/lower-than-expected iron ore and coal prices, possibility of breaching covenants (on reduced cash flow generation) and increase/decrease of foreign exchange rates, particularly for the Australian Dollar.

Investors don’t appear too worried today, however. Cliffs shares have gained 6.3% to $8.69 at 1:35 p.m. today, even as BHP Billiton (BHP) has fallen 1.5% to $55 and Rio Tinto (RIO) has dropped 2.4% to $45.07.

The 1 Thing That Would Make Me Sell Altria Stock

Heading into 2014, Altria Group (NYSE: MO  ) was one of my largest holdings. The stock comprised 14% of my IRA portfolio. This allocation got even higher as the year unfolded, because Altria stock rallied considerably. This made me uncomfortable, because tobacco companies face some strong headwinds that may make future growth difficult.

Because of this, I decided to cut back on my tobacco exposure by selling about half of my Altria shares recently. However, I still hold a position, because the stock still has merits that make it worth owning. The most prominent of which is the dividend. Altria is a famous dividend stock, having raised its dividend an amazing 48 times in the last 44 years. Altria stock has a 4.2% dividend yield at recent prices, which makes it a solid pick for investors who need income now, such as retirees.

As a young investor with a long time horizon, though, I'm equally as concerned about dividend growth over the next several decades as I am with current dividend yield. For these reasons, I may sell my entire Altria position -- especially if Altria's foray into e-cigarettes flops.

Few growth opportunities left for big tobacco
Smoking is on the decline in the United States because of rising public and regulatory scrutiny of tobacco. It's true that Altria has a large portfolio of other products, including chewing tobacco, wine, and an equity stake in brewer SABMiller. But let's be clear: Owning Altria stock is about cigarettes first and foremost. Altria's flagship Marlboro brand, and by extension its Philip Morris USA business, represents the vast majority of the company's revenue and profits. Altria's smokeable products represented 90% of its revenue and operating income in the most recent quarter.

Unfortunately, the decline of smoking is taking its toll. Altria's operating profit from smokeable products over the first nine months of the year is down 5% year over year. Altria has produced growth from its smokeless products and wine, as well as a significant dividend from its SABMiller investment, but these still aren't enough to offset the decline in smoking. Over the first three quarters, Altria's earnings per share are down 5%.

If smoking goes down more, Altria is going down right along with it. That is, of course, unless the company comes up with a way to replace its traditional cigarettes with a different product.

Are e-cigs Altria's best hope?
Altria's venture into e-vapor is through its subsidiary Nu Mark, which manufactures the MarkTen brand. Altria initially began a trial of its MarkTen products last year in Indiana and Arizona, but after satisfactory results there, rolled out the brand nationally. Through the end of last quarter, MarkTen achieved distribution in 80,000 retail outlets across the country, and according to Altria, the product was ranked in the top three e-vapor brands in the western U.S. by retail market share. This quarter, Altria plans to complete its national expansion to the eastern half of the country.

It's clear that Altria has grand ambitions for its e-cig business. Altria also purchased Green Smoke's e-vapor business for $110 million. Investors should hold out high hopes for the MarkTen brand now that it has national reach thanks to Altria's superb distribution capabilities. In addition, Altria believes its proprietary technology will be favored by consumers thanks to its differentiated design. The company maintains that its "FourDraw" technology provides a better user experience. Altria doesn't yet break out its e-cig business as a separate reporting segment, presumably because it still represents a fledgling operation. But if traditional smoking continues to decline, the e-cig business will become hugely important for the company's future.

Not selling out... yet
Even though I've halved my position in Altria, I'm still holding on. The main reason is Altria's dividend, which is among the market's very best. Altria stock currently yields a hefty 4.2%, and it manages to pass along high single-digit dividend raises each year, which is very attractive for investors. However, with the well-documented declines in smoking in the United States, I'm concerned about Altria's long-term future.

It's critical for Altria to innovate in new product categories if it's going to continue its reputation as a premier dividend stock. I invest in companies with the stated intention of holding the stocks for decades. If Altria can't make significant progress in e-cigs, I'm not sure it will still have a place in my portfolio.

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HP's 3D Printing Technology: How Concerned Should Stratasys Ltd. (SSYS) Investors Be?

If you're closely following the 3D printing space, you know that Hewlett-Packard Company's (NYSE: HPQ  ) much-anticipated entrance into the fast-growing 3D printing market arrived last week. The 2D printing king unveiled its new 3D printing technology called "Multi Jet Fusion" and the enterprise-focused 3D printer based upon this tech that it plans to bring to market in 2016. The printer is reportedly 10 times faster than those powered by the leading 3D printing technologies, while sporting high precision, high resolution, and brilliant color capabilities -- and it will be priced less than the competition.   

How concerned should investors in industry leader Stratasys Ltd.  (NASDAQ: SSYS  )  be? 

HP's Multi Jet Fusion 3D printer. Source: HP.

HP's 3D Printing Technology

HP's Multi Jet Fusion tech is impressive. According to Computerworld, here's how Terry Wohlers, the 3D printing industry guru who runs the company that publishes the annual Wohlers Report, weighed in: 

HP's new 3D printer, if people see that and they're not blown away, then they don't understand what it takes to build parts using conventional manufacturing. It's not only a game changer, it's going to rewrite the rules in the 3D printing industry.

HP's 3D printing technology builds upon the company's proprietary thermal inkjet printing tech that powers many of its 2D printers. There are key commonalities between the technologies, so it's perhaps not surprising that HP was able to leverage its 2D printing expertise to achieve such outstanding speed, resolution, precision, and color properties with its 3D printing tech. HP's proclamation that its printer is 10 times faster than competing technologies uses the leading 3D printing technologies in the United States as reference points: selective laser sintering, or SLS, (one of 3D Systems' technologies) and fused deposition modeling, or FDM, (one of Stratasys' core techs).

How does HP's 3D printer achieve its industry-topping speed? By employing a unique feature -- a wide print bar with about 30,000 microscopic nozzles spraying 350 million drops per second of thermoplastic onto the print platform. The drops are 20 microns in size, which allows for extremely high resolution of about 1,200 dpi (dots per inch); most comparable printers have resolutions about half that. 

HP's Multi Jet Fusion 3D printer -- the print bar is shown on the right. Source: HP.

HP showed off some examples demonstrating the fine detail and brilliant color capabilities of its printer. Here's a slick model of an oil rig: 

Source: HP.

Simplified, HP's tech can be thought of as a kind of binder jetting technology, with a touch of laser sintering tech thrown in. Like binder jetting, the process involves the application of a binding agent -- which HP calls a "fusing agent" -- to the materials that are being built up layer by layer. And like laser sintering, the process involves applying what HP calls an "energy source" to fuse the materials.

As for materials, HP's printer will initially be able to print in a wide range of plastics. However, the company has said that it plans to expand the printer's capabilities to include ceramics and metals.

I'm a bit skeptical that this tech will be able to successfully compete with direct metal laser sintering --the most widely used metal 3D printing tech -- and electron beam melting when it comes to printing metals. (Among the publically traded players, 3D Systems offers DMLS printers, while Arcam is the sole manufacturer of EBM printers.) Binder jetting generally isn't considered as effective as these technologies at producing high-density metal components. Very high densities are required for critical end-use applications, such as in the aerospace and medical implant industries. That said, HP is surely pouring money into research and development, so a competitive metal 3D printer is possible. 

Does Stratasys have anything to fear from HP?

The short answer is "Possibly down the road." While HP has had well-publicized stumbles in the recent past, it shouldn't be underestimated. The company has deep pockets and already counts as customers many of the companies that it will likely be targeting with its 3D printer. So, it has the potential to offer compelling package deals and force margin squeezes on its smaller, pure-play 3D printing competitors. 

That said, there is still a huge difference between unveiling a compelling product and actually successfully bringing it to market. For this reason -- and the reasons I'll outline below -- investors in Stratasys should sit tight, as there is no reason for undue concern at this point.

The 3D printing market is projected to explode in size
According to the 2014 Wohlers Report, revenue for the industry grew year over year by 35% to $3.1 billion in 2013. Wohlers projects that the market will exceed $21 billion by 2020. That's a torrid annual growth rate of more than 31%. Other companies are predicting even faster growth.

So, there's room at the 3D printing party for a new entrant, even a big player. 

HP's entrance could accelerate the industry's growth 
HP's entrance into the market could benefit Stratasys by helping increase the total size of the market. 3D printing is still in its early stages, especially for production applications. The entrance of a company of HP's size into the market should help increase awareness of the technology, which could speed up the market's already projected fast growth. 

Additionally, when a new formidable company enters a market, it forces existing players to up their innovation game. So, it's likely that the two leaders, Stratasys and 3D Systems, will ramp up their R&D spending. This could unleash even faster innovation in the space, which could lead to an acceleration in the growth of the market.

HP's 3D printer launch is at least two years away
It won't be until 2016 at the earliest that HP launches its printer. One-and-a-half to two years is an eternity in the tech world. Stratasys' product offerings won't remain static during this period. The company has maintained a steady R&D budget in the 10%-11% of revenue range, which has enabled it to continue to improve its technology and roll out new products.

Stratasys' largely R&D-driven organic growth is a key reason that it should be effective at fending off competition from HP and other new entrants into the market. While competitor 3D Systems has a few advantages in its moat bag of tricks that Stratasys does not -- namely its greater diversity of technologies, its metal printer offerings, and its Project Ara partnership with Google to develop a high-speed, continuous, fabrication-grade platform -- the fact that its growth has largely been acquisition-driven could make it more vulnerable than Stratasys over the long term, in my opinion.

Stratasys is diversified
Stratasys' revenue breakdown by segment for Q2:

Segment Percentage of Total Revenue 

Product, excluding MakerBot*	67.5%
MakerBot	18.8%
Services	13.7%

*Includes sales of printers and materials. Source: Stratasys Q2 earnings report.

Stratasys closed on its acquisitions of Solid Concepts and Harvest Technologies, both of which provide on-demand 3D printing services, in the second quarter. So, its services percentage of revenue will almost surely increase in the near term. 

Stratasys has three 3D printing technologies upon which its 3D printers are based:

Fused deposition modeling, or FDM PolyJet Wax deposition modeling, or WDM

Which technologies and business segments might be most vulnerable to competition from HP's printer?
Stratasys' proprietary PolyJet technology is the most similar to HP's tech. It jets layers of UV-curable liquid photopolymer onto a build tray. Its key strengths are its ability to produce complex shapes, intricate details, and smooth surfaces.

However, there are at least three factors that should help mitigate HP's competitive threat here:

Two analysts have opined that HP's tech appears more similar to 3D Systems' multijet modeling technology than to Stratasys' PolyJet tech. If this proves accurate, it's not Stratasys that has the lowest-hanging fruit. Stratasys' PolyJet line is heavily geared toward advanced prototyping, rather than production. It seems that HP's printer will be aimed at production applications.  Stratasys' Objet Connex500 Connex printers -- a high-end line that's been selling well -- sport 16-micron resolution versus HP's printer's 20-micron resolution. 

Stratasys' Fortus 3D printers, which are powered by FDM tech, could also be vulnerable. These printers are primarily targeted to production applications, so HP's printer's speed advantage should put it in play as a competitor for some applications.  

In addition to targeting enterprise customers, HP will surely be marketing its 3D printer to on-demand 3D printing service operations, which could present competition to Stratasys' services segment. Last fall, HP CEO Meg Whitman implied such when she was quoted by the The Register as saying: "[We're asking] how do we commercialise to print faster, at lower price points, to enable service providers?" 

In fact, Shapeways CEO Peter Weijmarshausen joined HP execs on the stage last week to share his accolades of the printer. Shapeways is the Amazon.com of the 3D printing space, providing 3D printing services for consumers through to larger businesses, with a focus on consumers and small businesses.  

Which products appear safe from competition from HP? 
The company's desktop models should be safe, as HP's initial offering is intended for a factory floor. Stratasys' well-known MakerBot printers fall into this category, as do its uPrint and Mojo printers. These latter printers, which are based on FDM tech, are commercial-grade machines targeted to enterprise customers. 

Additionally, Stratasys' WDM 3D printers shouldn't be affected by HP's entrance into the market. These printers build waxlike castings for the dental market. Stratasys doesn't break out its printer sales by product line, but it's a big player in the dental market. 

Bottom line

No matter how compelling HP's 3D printing technology is, it's highly unlikely that one technology is ever going to be the best fit for all -- or even most -- applications and materials. Furthermore, since the 3D printing market is projected to explode in size and Stratasys has proven that it can both innovate and execute well, its future still looks bright at this point.

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Ron Muhlenkamp's Quarterly Memorandum To Investors

My first draft of this letter, which I wrote three weeks ago began with:

Europe has not solved its problems Nor has Japan; Nor has China; Nor has the U.S.

The rest of that draft is now obsolete.

Since mid-September, several items have changed—some economic, some market-related, some psychological.

Economically…

The International Monetary Fund (IMF) has lowered its estimate of world Gross Domestic Product (GDP) growth going forward. Germany (the strongest economy in Europe) has reported disappointing numbers, particularly in capital goods. It looks like Europe is back in recession. The U.S. Federal Reserve Bank (Fed) lowered its estimates of U.S. GDP growth for the next four years. Crude oil, which was trading in a range of $100-$110/barrel, fell to $82/barrel The surprise was an announcement by Saudi Arabia that they would not try to keep the price above $100/barrel. This is a change from their prior policy.

Markets…

Many hedge funds are having a poor year and are facing redemptions. CalPERS (California Public Employees' Retirement System) announced that they were withdrawing $25 billion from hedge funds. This drives "forced selling" by those funds. The difficulty is estimating the size of the forced selling. Ten-year U.S. Treasury bond yields fell from a range of 2.40%-2.6% to (briefly) below 2 percent. A huge move in a short period of time, the headline is "A Flight to Quality."

(Mostly) Psychological…

The battle against ISIS in the Middle East. Ebola and the Centers for Disease Control (CDC): It appears that the Center is not prepared for disease control.

All of this together resulted in stock market declines of 7-12% in a month, depending on which index you measure. The size of this "correction" was not unexpected, but the short time frame was unusual. On some days the forced selling appeared to feed on itself and bordered on panic liquidation. As I write this letter on 10/17, this selling has abated, at least for the time being. The good news is that we raised some cash coming into this period, and

J.C. Penney's Friday Pop -- Is It Time to Get Into the Shares?

The lowest weekly initial jobless claims figure in seven years was not enough to lift U.S. stocks on Thursday, with the benchmark S&P 500 and the narrower Dow Jones Industrial Average (DJINDICES: ^DJI  ) down 0.9% and 1%, respectively. Unusually, the technology-heavy Nasdaq Composite Index (NASDAQINDEX: ^IXIC  ) was less volatile than the former two indexes, losing just 0.8%. In company-specific news, it appears that disappointing results from Wal-Mart Stores (NYSE: WMT  ) and Kohl's this morning weighed on the retail sector today, including J.C. Penney (NYSE: JCP  ) , which fell 2.8%. But J.C. Penney shares will make that up -- and more -- tomorrow, as the shares surged by nearly a fifth in today's after-hours session on better-than-expected first-quarter results. Is it time for investors to take a look at this turnaround story?

On the numbers: J.C. Penney beat Wall Street's expectations for revenues and earnings per share, as the following table demonstrates.

 

Actual/ Year-on-year growth (decline)

Analysts' c onsensus estimate

Revenues	$2.8 billion 6.3%	$2.7 billion
Earnings-per-share	($1.15) (27.2%)	($1.25)

Source: J.C. Penney, Thomson FN

A same-store sales increase of 6.2% is impressive compared to its larger (and more stable) rivals – U.S. same-store sales at Walmart were flat, for example. However, this is partially a reflection of the challenges J.C. Penney faces and, consequently, greater volatility in its operating results.

Nevertheless, the company's outlook for the full year was pretty upbeat, including a mid-single-digit increase in same-store sales, significantly improved gross margin versus 2013, and free cash flow at breakeven. Moreover, the company appears to have warded off the risk of a cash crunch with an increased credit facility of $2.35 billion.

Where does that leave investors?
In early February when J.C. Penney announced its first instance of quarterly same-store sales growth in two-and-a-half years, I nevertheless wrote that individual investors ought to avoid the stock. Since the publication of that article on Feb. 4, the stock is up by nearly two-thirds – and that doesn't even include the pop the shares will experience tomorrow.

Was I wrong? In a very basic sense, the answer is, "Obviously, yes." In hindsight, it's now clear that the pessimism surrounding the stock was culminating as I was writing the article (literally so -- the shares put in their 52-week low of $4.90 on the publication date.) However, it's worth reviewing the rationale I invoked at the time, which had nothing to do with trying to second-guess investor sentiment:

Turnarounds are very difficult to pull off. Turnarounds in the brutally competitive retail sector are even more challenging, and the results can't always be maintained -- at which point, another turnaround becomes necessary. J.C. Penney belongs in the "too hard" pile – investors would be better off focusing their limited time and resources on outstanding, durable businesses.

Furthermore, one decent quarter does not diminish the challenges still ahead for J.C. Penney. The company isn't expected to earn a profit this year or the next; meanwhile, larger, profitable competitors -- bricks-and-mortar and online -- aren't exactly standing still. J.C. Penney may provide market-beating returns for investors who are either lucky, or a combination of knowledgeable and dedicated (or all three), but I continue to think the shares are generally unsuitable for individual investors.

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Checking Up on Your Broker

Responding to horror stories of brokers who run wild with customer assets—by, say, churning accounts or recommending inappropriate investments—Americans have gotten good at doing a little research before hiring. Millions of people turn to the Financial Industry Regulatory Authority's online BrokerCheck tool each year to get background info on investment professionals.

See Also: No Day in Court for Injured Investors

However, recent research uncovered troubling gaps in the disclosures provided by Finra, the brokerage industry's self-regulatory arm. A Wall Street Journal investigation found that the database failed to include criminal records or personal-bankruptcy filings for 1,600 brokers. The study also confirmed what one might have expected—that brokers who repeatedly failed licensing examinations had worse complaint histories than those who passed their exams on the first try. A separate study by the Public Investors Arbitration Bar Association, a group of securities lawyers, found that information reported by state securities regulators—including tax liens, bankruptcies, results of broker licensing exams and the reasons brokers were fired from previous jobs—was often excluded from this public database, too.

Finra says it does disclose termination data when brokers leave in the wake of fraud or misconduct allegations. But it wouldn't necessarily report a case of a supervisor who found a broker incompetent. Some state regulators would.

Finra originally defended its disclosure policies, saying they reflected an appropriate balance between customer and broker rights. But now it says it's launched an internal study to determine whether there's a "meaningful relationship" between currently undisclosed data, such as failed examinations, and broker misconduct.

In addition, the self-regulatory organization is now requiring member firms to do background checks on new hires. It is also launching a nationwide database search to make sure that criminals have not been able to infiltrate the industry by simply failing to disclose past transgressions. Once this initial search is complete, Finra says, it will conduct periodic reviews of public records to ensure that the disclosures in BrokerCheck are kept up-to-date and complete.

Finra says it has long urged investors to take the extra step of supplementing the information they find on BrokerCheck with information filed with their state securities departments. State securities regulators often disclose more information about financial professionals than is available through BrokerCheck. The North American Securities Administrators Association maintains an online listing of state securities offices. But don't expect easy going at the state level. Most state securities offices can be contacted only by phone, and some charge to copy and mail files.

4 Stocks Under $10 Triggering Breakout Trades

DELAFIELD, Wis. (Stockpickr) -- At Stockpickr, we track daily portfolios of stocks that are the biggest percentage gainers and the biggest percentage losers.

Must Read: Warren Buffett's Top 10 Dividend Stocks




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.

Must Read: 5 Stocks Insiders Love Right Now

Eagle Rock Energy Partners

Eagle Rock Energy Partners (EROC), together with its subsidiaries, develops and produces oil and natural gas property interests. This stock closed up 3.9% to $3.44 in Thursday's trading session.

Thursday's Range: $3.33-$3.50

52-Week Range: $2.64-$6.75

Thursday's Volume: 1.32 million

Three-Month Average Volume: 668,254

From a technical perspective, EROC jumped higher here right above some near-term support at $3.20 with strong upside volume. This stock has been uptrending for the last few weeks, with shares moving higher from its low of $2.64 to its recent high of $3.60. During that move, shares of EROC have been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of EROC within range of triggering a near-term breakout trade. That trade will hit if EROC manages to take out some key near-term overhead resistance levels at $3.60 to its 50-day moving average at $3.68 and then above $3.80 to $3.92 with high volume.

Traders should now look for long-biased trades in EROC as long as it's trending above some near-term support at $3.20 and then once it sustains a move or close above those breakout levels with volume that hits near or above 668,254 shares. If that breakout triggers soon, then EROC will set up to re-test or possibly take out its next major overhead resistance levels at $4.50 to its 200-day moving average of $4.54, or even $5.

Must Read: 5 Big Stocks to Trade for Gains as QE3 Ends

Rada Electronic Industries

Rada Electronic Industries (RADA), a defense electronics contractor, is engaged in the development, manufacture and sale of defense electronics to various air forces and companies worldwide. This stock closed up 11.4% to $2.43 in Thursday's trading session.

Thursday's Range: $2.13-$2.44

52-Week Range: $1.26-$6.29

Thursday's Volume: 481,000

Three-Month Average Volume: 2.20 million

From a technical perspective, RADA exploded higher here right above some near-term support at $2.04 with lighter-than-average volume. This strong move to the upside on Thursday is now quickly pushing shares of RADA within range of triggering a big breakout trade. That trade will hit if RADA manages to take out its 50-day moving average of $2.44 and then once it clears more near-term overhead resistance at $2.65 with high volume.

Traders should now look for long-biased trades in RADA as long as it's trending above Thursday's intraday low $2.13 or above more near-term support at $2.04 and then once it sustains a move or close above those breakout levels with volume that hits near or above 2.20 million shares. If that breakout hits soon, then RADA will set up to re-test or possibly take out its next major overhead resistance levels at $3.30 to $4.

Must Read: How to Trade the Market's Most-Active Stocks

TravelCenters of America

TravelCenters of America (TA) operates and franchises travel centers primarily along the U.S. interstate highway system. This stock closed up 1.1% to $9.45 in Thursday's trading session.

Thursday's Range: $9.19-$9.45

52-Week Range: $7.18-$11.85

Thursday's Volume: 135,000

Three-Month Average Volume: 347,911

From a technical perspective, TA trended modestly higher here right above some near-term support at $8.82 and above its 200-day moving average of $8.70 with lighter-than-average volume. This stock has been uptrending a bit for the last few weeks, with shares moving higher from its low of $8.36 to its recent high of $9.62. During that move, shares of TA have been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of TA within range of triggering a near-term breakout trade. That trade will hit if TA manages to take out some key near-term overhead resistance levels at $9.51 to $9.62 with high volume.

Traders should now look for long-biased trades in TA as long as it's trending above $9 or above more near-term support levels at $8.82 to its 200-day at $8.70 and then once it takes out those breakout levels with volume that hits near or above 347,911 shares. If that breakout kicks off soon, then TA will set up to re-test or possibly take out its next major overhead resistance levels at its 50-day moving average of $10.22 to $10.75. Any high-volume move above $10.75 will then give TA a chance to re-fill some of its previous gap-down-day zone from late September that started at $11.69.

Must Read: 5 Hated Earnings Stocks You Should Love

Vapor

Vapor (VPCO) designs, markets and distributes electronic cigarettes, vaporizers, e-liquids and accessories primarily in the U.S. and Canada. This stock closed up 5% to $2.09 in Thursday's trading session.

Thursday's Range: $1.95-$2.18

52-Week Range: $1.02-$10.00

Thursday's Volume: 501,000

Three-Month Average Volume: 446,529

From a technical perspective, VPCO spiked sharply higher here right above its 50-day moving average of $1.74 with above-average volume. This jump to the upside on Thursday is starting to push shares of VPCO within range of triggering a big breakout trade. That trade will hit if VPCO manages to take out some key near-term overhead resistance levels at Thursday's intraday high of $2.18 to $2.50 and then above more resistance at $2.63 to $2.88 with high volume.

Traders should now look for long-biased trades in VPCO as long as it's trending above Thursday's intraday low of $1.95 or above its 50-day at $1.74 and then once it sustains a move or close above those breakout levels with volume that hits near or above 446,529 shares. If that breakout develops soon, then VPCO will set up to re-test or possibly take out its next major overhead level near $4.

To see more stocks that are making notable moves higher, check out the Stocks Under $10 Moving Higher portfolio on Stockpickr.

-- Written by Roberto Pedone in Delafield, Wis.

Must Read: 10 Stocks Carl Icahn Loves in 2014

Follow Stockpickr on Twitter and become a fan on Facebook.

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.