Your stock just took a nosedive -- but don't panic. First, let's see whether it had good reason to fall. Sometimes, panic-fueled drops can make excellent buying opportunities. Here's the latest crop of cratered stocks that could provide a possibility for profit:

Stock

CAPS Rating
(out of 5)

Thursday's Change

Aastrom Biosciences (Nasdaq: ASTM)*(35.6%)
SmartHeat (Nasdaq: HEAT)*****(11.5%)
LJ International (Nasdaq: JADE)***(7.6%)

The market soared 173 points yesterday, or 1.6%, as the General Motors (NYSE: GM) IPO buoyed stocks. But stocks that went down significantly in the other direction are big deals.

The devil's in the details
Did Aastrom Biosciences bulls win the battle but lose the war? Just the other day, they were pushing the point that the biotech's autologous stem cell therapy in patients with critical limb ischemia (CLI) -- a condition that often leads to amputation -- would prove efficacious when the results were released, and they were right. The failures of sanofi-aventis and Vical (Nasdaq: VICL) had no bearing on its own study results, which showed the therapy met safety and efficacy goals. Unfortunately, the midstage trial also failed to show statistically significant amputation-free survival in patients, and the stock tanked.

However, bulls might not want to give up just yet. As one analyst noted, the trial did what it was supposed to and now the therapy can go on to bigger phase 3 trials. The survival data was just too small of a subset to be conclusive one way or the other, and the larger trials could back up the earlier positive data Aastrom found.

Highly rated CAPS All-Star kinosternon figured the recent run-up was too much too soon, but likes the long-term prognosis:

In the long term I'm extremely optimistic about this company; I've always liked them. For starters, they work with the stem cells that have actually been shown to be successful in humans (non-embryonic). In the short term, however, the recent run-up was too much and too fast.

Let us know on the Aastrom Biosciences CAPS page whether shares of this biotech will bounce back.

The sky's not the limit
With China clamping down on its overheating economy, SmartHeat, a maker of energy-saving products, may wilt under any restrictions or reductions in government initiatives. After all, it was government spending that fueled the153% increase in revenues it enjoyed last year. 

The stock has already been scorched, dropping over 65% so far this year and more than 26% over the past week alone. A recent earnings report that beat expectations still caused the stock to drop because of a cautious outlook for 2011, and the company followed that up yesterday by pricing a secondary offering of 5 million shares at just $5 a stub, almost 12% below where the stock had been trading. Needless to say, investors sent the shares tumbling once again.

Considering its rather strong earnings, CAPS member cec76 believes SmartHeat represents an attractive buy at these prices: "value buy, great Q3 results. cheap after a couple days of being beat up."

Add SmartHeat to your watchlist, where all the Foolish news and analysis about this stock is aggregated for you.

A giant leap down
The fallout from accounting irregularities at Chinese jewelry designer Fuqi International (Nasdaq: FUQI) hasn't dragged LJ International down with it. Where shares of Fuqi are off by almost 65% so far this year, the stock of Hong Kong-based manufacturer and wholesaler LJ International are some 94% higher, even after yesterday's drop.

That could be because while China markets represent about half of its revenues, which are derived through its ENZO chain of stores, its wholesale business is global in scope and the U.S. and Canada account for 35% of total revenues.

The fallout from the U.S. recession has been felt by the jeweler, as is the case with online diamond seller Blue Nile (Nasdaq: NILE) and even chain store Zale. LJ International is hoping for continued economic growth at home while at least maintaining the status quo abroad.

CAPS member jonmetz2000 is counting on further store expansion next year to drive LJ higher, but tell us on the LJ International CAPS page whether you believe this jeweler is a diamond in the rough.

Ready for a resurrection
Just because your stock has taken a beating doesn't mean it's going to roll over and die. Markets are known for overreacting. A closer look at what's happened to your stock can give you an edge over other investors who just react to 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 it's ready to come back from the dead.

Blue Nile is a Motley Fool Rule Breakers recommendation. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Fool contributor Rich Duprey does not have a financial position in any of the stocks mentioned in the article. You can see his holdings here. The Motley Fool has a disclosure policy.