Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of independent oil and gas exploration company Approach Resources (Nasdaq: AREX ) shot up as much as 12% in intraday trading today, on higher-than-average volume.
So what: With no news out of the company today, there's little reason to believe there's any fundamental reason for the move. Earlier this month, Approach announced a hefty $100 million capital spending budget for 2011, and I suspect that investor hopes are sky-high that something big lies ahead. Shares have more than tripled since July.
Now what: If you salivate over screaming momentum, Approach's stock is right up your alley at present. A headline on Investor's Business Daily today reads "Watch for Continued Gains in Shares of Approach Resources" and specifically cites the "bullish momentum." If you ask me, though, momentum investing is a recipe for disappointment. Investors may be better served letting Approach's shares cool off before trying to handle them.
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