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.

On a day when the market was up big at 198 points, or almost 2%, even a high-flying blue chip can look like a volatile penny stock.

Think about this, though. Celldex Therapeutics surged ahead as midstage trials for its brain cancer vaccine CDX-110 showed positive results. Patients taking the vaccine, which spurs the immune system to attack cancer cells, lived twice as long as those on radiation and chemotherapy.

It was just a month ago that Celldex's shares plummeted when Pfizer (NYSE: PFE) pulled out of an agreement to develop the treatment. At the time, I suggested it represented an opportunity for investors to get in cheap because, although there might be some cash-flow issues in funding late stage trials itself, Pfizer wasn't leaving because of problems with the vaccine. It was just no longer a priority. Celldex's stock is up 34% since then.

CAPS All-Star member TMFBreakerJava says Celldex is now moving into territory previously reserved for Dendreon (Nasdaq: DNDN):

Startlingly good results released today in a glioblastoma drug trial. This is a vaccine style treatment, a domain which has been pursued without success until recent DNDN breakthrough in prostate cancer

The devil's in the details
Flagstar Bancorp is another stock that recently saw its shares crushed but is now surging again (and it's up another 16% so far this morning as I write).

The ailing financial institution had reported a string of eight quarterly losses, and Bloomberg reported rumors it had been quietly looking to private equity to raise $600 million through a stock sale to improve its balance sheet and make acquisitions. Although there doesn't seem to be any particular news causing Flagstar to jump now, perhaps investors are coming around to the thought that it won't go through with the offering. With shares trading at about half their book value, it might have seemed like too much of a good thing to let go unnoticed. Flagstar's stock is now up 36% from the time it fell, and it still looks like it's undervalued.

With only 60% of CAPS members rating Flagstar to outperform the broad market averages, it appears that many Fools are still skeptical about how well it can recover.

Where peer Huntington Bancshares (Nasdaq: HBAN) was able to turn a profit in the first quarter and expects to be profitable in 2010, Flagstar posted falling net interest margins and had to raise more capital by offering steeply discounted common stock. It's why the rumor of another stock offering hurt so bad.

Sunny days are here again
It was sweet news sending juice maker Jamba higher yesterday. It renewed its partnership with Nestle, the world's biggest food group, to produce a new line of caffeine-laced juice drinks. It provides a refreshing alternative to the $8 billion energy drink market currently dominated by Hansen Natural's (Nasdaq: HANS) Monster beverage.

Of course that's not enough to sway some skeptics. CAPS member cecamadocv thinks the juice market is just becoming too crowded for Jamba to stand out anymore:

Long Term my azz, you have Froyo World entering the market, and MCd's is getting into the smoothie business, D and D and Bk won't be far behind... They will charge cheaper prices as well... Jamba is gonna struggle...

You can drink in the competing visions on the Jamba CAPS page and offer your own opinion on whether the Nestle partnership gives it renewed lip-smacking growth opportunities. If you want to stay on top of what's happening with this juice giant, add it to your My Watchlist page, where all the Foolish news and analysis about this stock is aggregated for you.

Going into orbit
Just because your stock has taken to the stratosphere doesn't mean it won't lose altitude. Markets are known for overreacting. A closer look at what's happened to your stock can give you an edge over other investors who merely follow the market's lead.

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 reentry, or off to infinity and beyond.