Top Rocket Stocks: Ensco

For my weekly Rocket Stocks portfolio, I like to find beaten-up stocks that may snap back in the coming days based on specific catalysts ahead.

I am constantly checking lists of 52-week lows and analyst downgrades, hoping to spot out an oversold gem from which readers and fellow investors can profit.

As I have pointed out before, picking stocks ahead of catalysts is the best way to profit for near-term trades. These picks are not necessarily ideal long-term stocks for your 401(k), but they can make great short-term momentum trades.

Before we take a look at this week's Rocket Stocks let's see how last week's picks performed.

• LDK Solar(LDK Quote): Down 5% on the week.
• Walter Industries(WLT Quote): Up 8% on the week.
• Deere(DE Quote): Down 8% on the week.
• Teekay(TK Quote): Up 9% on the week.
• Imperial Sugar(IPSU Quote): Down 3% on the week.
• Canadian Solar(CSIQ Quote): Up 30% on the week.
• Hewlett-Packard(HPQ Quote): Down 4% on the week.
• Noah Education(NED Quote): Up 9% on the week.
• Shaw Group(SGR Quote): Up 10% on the week.
• UltraShort Oil & Gas ProShares(DUG Quote): Down 2% on the week.

Now let's take a look at the Rocket Stocks for the Week of May 19-May 23.

First up this week is Echelon(ELON Quote), a maker of remote utility and appliance management systems that help corporations use various energy systems better.

Echelon, which is set to report earnings today, could move higher based on a number of short-term factors. For starters, shares of Echelon have been in a wicked spiral since last summer, down about 80% from their highs above $30.

The company also has a massive short position of 21%, or about 6 million shares, which could create 18 days of pure buy-side pressure. On any piece of positive news, we could get a massive short-squeeze rally.

Another huge plus is that last week Echelon management effectively said, "The heck with Wall Street -- our stock is too cheap!" and announced a 3 million share buyback. This company obviously believes that the stock is undervalued and that it can build EPS through this buyback.