Whenever I get confused or lost on how to play a certain market condition, something I like to do is seek out stocks that are bucking the trend – doing opposite than what the overall market is doing.
Obviously, there are several ways to go about doing this, but I like to do a simple stock screen (learn how).
In this specific case, I am purely looking for stocks that have seen 20+% returns over the last month (S&P was down 10%). To narrow down the list to stocks I like, I also put a price parameter of between $5-$50 and an average volume of 500k.
Surprisingly, or not, depending on how you look at it, the scan produced 4 stocks, 2 of which simply gapped up. Taking those out I am left with the 2 below.
Note: This is not necessarily a recommendation of these stocks, but rather a glimpse of trying to see what works in this market and perhaps broaden that out a little to find more options. Also keep in mind, that if the market recovers, these stocks could be heading straight back down.
VAALCO Energy (EGY) – For the last month this stock has been on a steady uptrend. That slope of growth has seem to died down. Look for a bounce below or above resistance.
US Airways (LCC) – I don’t know what is more surprising: that an airlines made this list or that that airline was US Airways. That being said, this stock could be a short candiate should it support break.
Be sure to check out a free trend analysis of this or any stock.