Whoa! What Just Happened to My Stock?

Resist the urge to high-five everyone in the cubicles next to you. Your stock may have just strapped on a rocket pack and taken off for the moon, but smart investors won't celebrate until they know that upward leap was justified. Without a fundamental basis for the bounce, these stocks can quickly make the return trip down.

Is now the time to lock in profits, or is this just the first step toward even higher valuations down the road? Let's examine several stocks that just hit the afterburners, and see whether they're truly headed into orbit.

After yesterday's 178-point jump higher, a 1.5% move, the stock market is now back above the 12,000 mark. Fears about a Japan nuclear meltdown are so last week, to be replaced by ebullience for strafing runs over Libya. So stocks that went significantly higher are pretty big deals.

New frontiers in investing
Uranium lives! Just a week after the question was asked whether the nuclear power industry was dead and buried for the immediate future, Uranerz Energy jumped 25%, UR-Energy soared 18%, Denison Mines rose 10%, and even Cameco (NYSE: CCJ) was 8% higher. Of course, these stocks are still down sharply from where they traded just a month ago, but as Japan gains control over its reactor disaster and the safety of U.S. plants is more widely understood, suddenly yellowcake is a tasty morsel again.

When the hour was darkest in Japan and uranium plays seemed stale, CAPS All-Star rfaramir believed industry players like Uranerz would rebound simply because "Uranium will be needed again."

As it likes to do, the media fueled the hype and played up the hysteria of the Japanese situation, raising the specter of a Three-Mile Island meltdown or a Chernobyl-like catastrophe and predicting the worst. But with a third warfront opened, there are new crises for the media to exploit and that gives investors a chance to profit from the distraction.

Yet more than a third of the CAPS members rating Uranerz are skeptical that this particular uranium player will be able to outperform the broad market averages. Give the company a glowing endorsement on the Uranerz Energy CAPS page or let us know if you think the stock will meltdown again.

An option to buy
With options trading growing in popularity, Charles Schwab (Nasdaq: SCHW) announced it agreed to buy options trading specialist optionsXpress for almost $1 billion. It was only two years ago that TD AMERITRADE saw the same signs of growth potential and purchased thinkorswim.

Last month trading activity across most brokerages surged by double-digit amounts from the year-ago period, while sequentially from January it was a mixed bag. No doubt that Schwab's being the lone broker showing a decline in trading activity month-to-month helped seal its bid for the options trader. However, it may have been able to pick up optionsXpress on the cheap.

CAPS investor mypieceofpie looked at the options brokerage as a play on the market doing better, and the higher profile he saw for such trading obviously brought it to Schwab's attention:

At the low end of their range before the spike and sell-off. I am useing OptionsXpress as a general bet on the market doing better in 2011. The play with option trading in general is getting alot of exposure lately and I think this is good for [optionsXpress].

You have the option of putting optionsXpress on your watchlist to see if anyone else comes along to offer a higher bid.

Orienting itself
As oil soared to more than $115 a barrel, silver prices went with it as a hedge against the inflation we're experiencing. So while silver miners like Hecla Mining (NYSE: HL) rose 4% and Endeavour Silver went up 5%, Alexco Resource -- which recently made the transition from developer to producer by achieving production at its Bellekeno mine in the Yukon Territory -- scored the biggest gains. Silver Wheaton (NYSE: SLW), which holds a good slug of Alexco's silver stream production from the Keno Hill district, also had an up day.

The shorts who bet against Alexco earlier this year on the basis of the run-up in price it already enjoyed were caught as it continued its torrid pace. Shares have almost doubled over the past six months and are 170% higher than where they were a year ago.

While almost 90% of the CAPS members rating the silver miner believe it has good long-term prospects, there's still plenty of opportunity for investors who have not yet taken a position to get in. Alexco is largely flying under the radar of Wall Street, with only one analyst following it but not yet willing to provide any estimates on its future.

Keep an eye on Alexco Resource by adding it to the Fool's free portfolio tracker and see if it makes short-sellers look silly again.

Going into orbit
That's why it pays to start your own research on these stocks on Motley Fool CAPS, where you can read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made, all from the stock's CAPS page. Then you can decide for yourself whether your stock's headed for re-entry or off to infinity and beyond.