This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

5 Oversold Stocks Ready to Rebound

 DELAFIELD, Wis. (Stockpickr) -- I am a trend-following trader.

>>5 Rocket Stocks to Buy for a Market Bounce

Basically, trend-following is a trading discipline that consists of following price action in a stock over everything else, including fundamentals. Trends can develop in stocks in multiple ways. For instance, I prefer to buy stocks that are in a strong uptrend and have bullish upside volume flows. That being said, there's another way to trade trends that goes outside the conventional thinking of most trend followers and that is buying technically oversold stocks.

Stocks become oversold for many reasons, but the basic reason that I care about as a trend follower is that there were more sellers than buyers. Sure, this is simplistic, but why make trading any more difficult than it has to be?

Must Read: 5 Stocks Set to Soar on Bullish Earnings

Once a stock becomes oversold, I try to identify when buyers are moving back into the stock for a possible oversold bounce. One way to identify an oversold stock is to follow the relative strength index once it gets near or below 30. Another way is to look for a stock that's had an extended downtrend. Once I find an oversold situation, I start to look for a stock that's forming a bottoming pattern, or stabilizing at a defined level. I then look for above-average upside volume to move back into the name as a key downtrend line or resistance levels are taken out.

>>5 Stocks Set to Soar on Bullish Earnings

Traders have to remember that oversold can always become more oversold. That's why it's important to follow the price action and look for oversold stocks that have a probability--not a guarantee--of changing their trend and potentially spiking higher off depressed levels. These types of trades can yield big gains quickly, but remember that the price action is more important than the simple fact the stock is extremely oversold.

With that in mind, here's a look at five technically oversold stocks that could be setting up for sharp rebounds higher soon.

1 of 6

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
FSLR $51.75 -2.10%
FIVE $41.24 0.91%
GOGO $10.19 -2.30%
TWTR $14.86 6.00%
AAPL $94.23 -1.00%


Chart of I:DJI
DOW 17,653.49 -97.42 -0.55%
S&P 500 2,051.82 -11.55 -0.56%
NASDAQ 4,728.7270 -34.4970 -0.72%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs