The Top 10 Rocket Stocks for This Week

Don't even bother playing in the Beat the Street 2.0 trading contest if you're going to pick Wal-Mart(WMT Quote) or Microsoft(MSFT Quote). I happen to believe both could be great long-term investments, but to be competitive in a stock-picking contest you need to focus on two things: snapbacks and breakouts.

Hedge funds that focus on short-term trading have modeled out the various types of snapbacks and breakouts that occur. For this week, I've set up a Rocket Stocks of the Week portfolio that focuses on the stocks most likely to succeed for the week based on my own models.

Note that when you bet on volatility like this, it cuts both ways. But if you have a 60% chance of finding a great spike in stock price, then overall you'll do well. And if your odds climb slightly higher than 60%, there's a good chance you will win this contest.

Some of the stocks from last Thursday's Stockpickr article -- After Hoku's Ascent, Who's Next? -- have already had significant gains. For instance, there's Syntax-Brillian(BRLC Quote), which had a 14.5% snapback on Thursday and was also up slightly Friday. I'd stay clear of that one now.

Here are some stocks from this week's list that I believe have the potential to move higher this week.

Build-A-Bear Workshop(BBW Quote) fell 23% on Friday and ended up on the list of Biggest % Losers. The drop came after the plush-toy purveyor slashed its per-share earnings guidance for the current quarter from between 15 cents and 19 cents to between 7 cents and 10 cents and guided its outlook for the year down to $1.55 to $1.65 a share, down from $1.65 to $1.75.

A good rule of thumb is that if a stock falls by a higher percentage than the percentage of the per-year EPS guidedown, then it's a good potential for a snapback play. Even with this guidedown, Build-A-Bear has a forward price-to-earnings ratio of just 12 and trades at a multiple of just eight times cash flows. This profile makes Build-A-Bear an excellent buyout candidate here, and that's what people will be whispering on Monday. This is a buy at the open and a hold for a good 6%-to-10% quick snapback.