NEW YORK (TheStreet) -- I scan the markets every day searching for overbought and oversold stocks that are worth examining closer. In a market that is near all-time highs, finding beat-up stocks is surprisingly easy. The real trick is to separate dead-cat bounces from potential winners.
Dead cats can quickly smell up a portfolio, so before we make a move we want to have as much working for us as we can. Insider buying, improving earnings, technical indicators and other metrics can take the emotion out of investing and provide the courage to push the button while others are throwing in the white towel.
I like the following for a holding time of about six months and a profit target gain of about 30%. Never lose sight of the fact that there's a reason why investors walked away and be ready to do the same if they don't work out.
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