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2 Oversold Stocks That Could Bounce Higher

Stocks in this article: ONTXCAM

Cameron International

Cameron International ( CAM) is a provider of flow equipment products, systems and services to worldwide oil, gas and process industries. This stock closed up 2.2% at $54.44 in Monday's trading session.

Monday's Volume: 11.19 million
Three-Month Average Volume: 3.09 million
Volume % Change: 294%

>>5 Stocks Under $10 Set to Soar

From a technical perspective, CAM bounced modestly higher here right above its recent low of $52.50 with heavy upside volume. This stock recently gapped down sharply from over $63 to below $52.50 with heavy downside volume. That move pushed shares of CAM into oversold territory, since its current relative strength index reading is 31.60. Oversold can always get more oversold, but it's also an area a stock can bounce sharply higher from. The action in CAM on Monday could be signaling that this stock is ready to bounce and see an end in the short-term to its downside volatility.

Traders should now look for long-biased trades in CAM as long as it's trending above Monday's low of $53.02 or above $52.50 and then once it sustains a move or close above Monday's high of $54.67 with volume that hits near or above 3.09 million shares. If we get that move soon, then CAM will set up to bounce higher and potentially tag $57 to its 50-day moving average at $59.39.

To see more stocks rising on unusual volume, check out the Stocks Rising on Unusual Volume portfolio on Stockpickr.

-- Written by Roberto Pedone in Delafield, Wis.

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Follow Stockpickr on Twitter and become a fan on Facebook.

At the time of publication, author had no positions in stocks mentioned.

Roberto Pedone, based out of Delafield, Wis., is an independent trader who focuses on technical analysis for small- and large-cap stocks, options, futures, commodities and currencies. Roberto studied international business at the Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany. His work has appeared on financial outlets including CNBC.com and Forbes.com. You can follow Pedone on Twitter at www.twitter.com/zerosum24 or @zerosum24.

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