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Top Rocket Stocks for the Week of Sept. 24

I have been calling for a snapback rally since the end of August, and last week it finally arrived. On Tuesday, the Federal Reserve cut the federal funds interest rate by 50 basis points, sending some of our Rocket Stocks picks up as much as 20%.

However, statistically speaking, this coming week likely will be flat to mildly down as traders and investors look to lock in some gains. Of course, as I've pointed out before, this doesn't really matter. Even if the market has a disastrous week, it will still be the case that out of the roughly 8,000 public companies, at least 1,000 to 2,000 stocks will go up. It's our job to find and bring you those stocks.

This weeks Rocket Stocks -- Rocket Stocks for the Week of September 24th-28th -- are primarily based around potential snapback plays as well as a few short squeeze candidates.

But before I make any recommendations, let's take a quick look at how last week's picks panned out:

  • Harley-Davidson (HOG - Get Report), up as much as 6% and ending the week up 3.5%.
  • Kohl's (KSS - Get Report), up as much as 8.5% and ending the week up 6%.
  • Level 3 Communications (LVLT), up as much as 9% and ending the week up 3.3%
  • New York Community Bancorp (NYB), up as much as 7.5% and ending the week up 3.3%.
  • Suncor Energy (SU), up as much as 3% and ending the week down 1%.
  • Lehman Brothers (LEH) up as much as 14% and ending the week up 6.9%.
  • Meritage Homes (MTH) up as much as 20% and ending the week down 3.4%
  • Eagle Materials (EXP), up as much as 4% and ending the week only slightly up (0.8%).
  • Cyberonics (CYBX), up as much as 2.7% and ending the week up 1.4%.
  • EMC (EMC), up as much as 2% and ending the week slightly down.
  • Countrywide Financial (CFC) (a midweek addition), flat and ending the week down 4%.
  • Vaalco Energy (EGY), (a midweek addition), up some 5% and ending the week up 3%.

My favorite place to look for potential rocket stocks, or short-term trades, is the 52-week-low list for the prior week. This is where you can usually find the type of beaten-down stocks that move fast and furious. As an example, testing on the components of the Nasdaq 100 shows that a stock that drops 10% in a day will, on average, be 2% higher one week later. Conversely, if a stock is up 10% in a day, it is usually down one week later.

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