10 Stocks Under $10: General Moly (GMO)

General Moly (AMEX: GMO) is a mining company that specializes in mineral development and exploration in central Nevada. On November 19, the company announced a strategic alliance with ArcelorMittal (NYSE: MT), which includes MT's purchase of 8.2 million shares at $8.50 per share, for a net investment of about $70 million. After this transaction, MT will own roughly 12.6% of GMO's outstanding shares. GMO will in turn supply approximately 6.5 million pounds of molybdenum each year for five years once its Mt. Hope deposit begins production.

GMO shares have been moving higher since February, when they collided into their 10-month and 20-month moving averages after months of sideways consolidation. Since this impact, the stock has nearly quadrupled in value to hit a new all-time high.

Currently, from a shorter-term perspective, the stock is pulling back to test double-barreled support around the $8.50 level. Not only is this the site of the security's July 2007 valuation (former resistance can come back and serve as support), but it is currently home to GMO's rising 10-day moving average as well.