Whoa! My Stock Just Whupped the Market!

Hoping against hope that Greece will get its financial act together, the markets staged another rally yesterday. But just because your stock strapped on a rocket pack and went even higher, resist the urge to high-five everyone in the cubicles next to you. 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.

With the markets rising 208 points yesterday, or 1.8%, stocks that went appreciably higher are pretty big deals.

Shining a light on growth
Unlike with some of the treatments going through clinical trials and building up investor hopes, Medivation is proving that its therapy actually works. Its prostate cancer drug candidate MDV3100, taken orally, helped patients live on average five months longer than a placebo while inducing relatively mild side effects. The announcement about the late-stage trials sent investors into a frenzy.

It wasn't just the positive results that got investors ebullient, but also the fact that this came on the heels of Dendreon (Nasdaq: DNDN) reporting lackluster growth of Provenge and the potential for falling sales, and Exelixis starting the week off by failing to convince the FDA to sign off on a trial design for its own treatment.

CAPS member MajorBob04 thinks the dramatic run-up in the stock isn't over yet for Medivation: "This stock will skyrocket now that trial results are positive and indicating that trial participants receiving the placebo will switch to the actual drug because of efficacy."

Add the biotech to your watchlist to see how it performs from here and whether it will fulfill the promise that Dendreon and Exelixis seem to be falling short on.

Taking flight
Investors also liked what they heard from online travel agent Orbitz Worldwide. Even though its domestic bookings business, which comprises the greatest portion of its total revenues, fell 4% from the year-ago period, its international bookings rose 31%, helping Orbitz raise its full-year revenue forecast from a range of $752 million-$762 million to $760 million-$764 million.

The domestic business was very much like that experienced by Expedia last week, which saw U.S. airline ticket sales fall 10%. Despite its TripAdvisor subsidiary reporting decent growth, the fact that it is spinning the division off muted the benefit that would contribute to the remaining business.

This is exceptional news for priceline.com (Nasdaq: PCLN) investors, since the Name Your Own Price leader dominates the international travel markets through its Bookings.com and Agoda services. International bookings represented more than three-quarters of Priceline's total last quarter, so if Orbitz is seeing international growth, it's mostly likely going to play into Priceline's hands, too.

Highly rated CAPS All-Star mdicksonjr thinks the market's reaction to Orbitz's earnings is much ado about nothing:

Basically, flat revenue growth and excessive debt. Why buy this? Trade fodder.

Tell us on the Orbitz CAPS page or in the comments section below whether you agree that investors should be focusing more on how its domestic business is performing. Then go and add it to your watchlist to see how it plays out.

Pump up the volume
There's a benefit to making up in volume what you give up in price. Just ask e-commerce retailer MercadoLibre, which reported profits soaring 40% from last year on a 46% increase in revenues. By offering its retailers lower-price ad options, it was able to increase the number of sellers on its site. Gross merchandise volume grew 52% to $1.3 billion, while total payment volume nearly doubled.

The growth of Internet usage in Latin America is a secular trend MercadoLibre is taking advantage of. While its home country of Brazil saw 38% growth, Agentina was up 55% and Venezuela rose 57%. Taking a page from both eBay (Nasdaq: EBAY) and Amazon.com (Nasdaq: AMZN), MercadoLibre is setting itself up as the dominant Internet e-commerce platform throughout Latin America.

Earlier this summer, CAPS member drewsd35 figured that as long as the southern hemisphere didn't lapse into recession as the rest of the world seemed to be doing, MercadoLibre should come out ahead: "Leader in Latin America ecomerce this company is heading in the right direction and as long as the US does not fall into a recession [MercadoLibre] will still hold."

Add MercadoLibre to the Fool's free portfolio tracker if you'd like to see whether it can up the volume for additional opportunities in the future.