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Top Rocket Stocks for Week of March 31

James Altucher

It doesn't matter if the market goes up or down. Even if the market has a disastrous, disastrous week, out of the 8,000 or so public companies, there still will be hundreds of stocks that will climb.

Even in the bear market of 2000-2002, the best strategy proved to be selectively finding volatile stocks to go long. One successful intraday strategy is to buy a stock that finished the previous day down and is set to gap down 5% or more the following day. Sell the stock if it hits the previous day's close or if the stock closes the day without hitting the profit target.

Back testing shows this strategy to be successful 68.4% of the time with an average profit of 1.97% per trade.

Before we get to this week's Rocket Stock portfolio, let's look at how last week's picks fared.

• Baidu.com (BIDU Quote): Up 14.9% on the week as the company named Jennifer Li as its chief financial offer.
• Borders Group (BGP Quote): Up 12.2% for the week.
• 3Com (COMS Quote): This stock, which triggered a buy on Stockpickr.com's 3x2 trader system, ended the week up 10.6%. The company came out and report better-than-expected earnings and was upgraded by Bernstein.
• National Oilwell Varco (NOV Quote): Up 10% on the week as crude oil rallied and helped boost this oversold stock.
• Lindsay (LNN Quote): Up 5.3% on the week after making a fresh 52-week high early Tuesday morning.
• Market Vectors Global Agribusiness ETF (MOO Quote): Up 5.2% on the week as agriculture stocks like Potash (POT Quote) and Terra Nitrogen (TNH Quote) rallied.
• Verizon (VZ Quote): Down 2% on the week.
• New York Community Bancorp (NYB Quote): Down 4.8% on the week as overall credit concerns re-entered the market.
• Robbins & Myers (RBN Quote): Down 6.5% for the week after reporting a 12% decline in its fluid management business.
• Pep Boys (PBY Quote): Down 14.8%.

Now let's take a look at a couple of picks from the Rocket Stocks for the Week of March 31-April 4.

One stock worth keeping an eye on this week is Nortel Networks (NT Quote), which on March 20 hit a new 52-week low of $5.73. While it's now back around $6.42, the stock is well off the 52-week high of $26.49 it hit back in June.

Last week, the CEO of Nortel bought 79,000 shares for prices ranging between $6.20 and $6.37 per share. That kind of buying suggests the stock offers a great value here. Nortel has a forward price-to-earnings (P/E) ratio of 6.6 and stated book value of $6.30 per share.

Also last week, Nortel won a five-year contract from U.S. Cellular to beef up the wireless company's network. The deal will allow U.S. Cellular, the sixth largest wireless company in the U.S., to keep adding subscribers and provide additional Web browsing services.

Another play to watch is Evergreen Solar (ESLR Quote). With the solar stocks coming back into favor, Evergreen is the best positioned as it has in place a 10-year polysilicon supply deal, which should limit its costs.

Evergreen also has a 12% short position, which could fuel a sharp rally. So, as traders try to boost performance and as oil trades at record levels, look for a rally, even if it is short-lived, in the solar stocks.

For more detailed analysis and the rest of this week's picks, including Research In Motion (RIMM Quote), Motorola (MOT Quote), which is set to report earnings this week, and Valero (VLO Quote), a recession and earnings play into this week, check out the Rocket Stocks for the Week of March 31-April 4 at Stockickr.com.

As always, to find the snapbacks and potential breakouts on a regular basis, check out these Stockpickr portfolios, which I use in my own research each week:

• Today's Hot List: This daily list is a must-view every midday to see what stocks are making the biggest moves and why.
• Always check the Biggest Percentage Losers, a list of stocks that lost big the day before, because they can snap back hard.

  When you check this list on Stockpickr, you can see which stocks are owned by the quality hedge funds and mutual funds. Pay attention to those. They will be buying at the lower prices, so you should be also.

• Ditto for the 52-week-low list. You must check the above two lists every day if you hope to find volatile stocks.
• Biotech Short Squeezes: Dendreon (DNDN Quote) and others can often be found in this category.
• Stocks Rising on Unusual Volume: These are potential breakout stocks.
• Stockpickr's System Trades of the Day: These are trades triggering that day in various back tested trading systems we've developed.
• Stocks With Unusual Option Activity: Perhaps someone knows something?
• Latest Activist Situations: These are beaten-down stocks that hedge funds are accumulating shares of and demanding change in. Believe me, these hedge funds piggyback each other. And once they start rocking the boat, things happen quickly. This should be on your must-view list.

One final place to frequent is the Answers section on Stockpickr, where ideas such as those presented in this article are thrown around daily.