This Week's Rocket Stocks Portfolio Update

Two additional picks for the list.
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I have said for some time that, longer term, there is no statistical correlation between key interest rates and overall market performance. That said, Tuesday's snapback rally was certainly sweet. The combination of hedge funds shorting this market and the fact that Bernanke and company took everyone by surprise made for "the perfect storm" -- shorts covering into a higher market.

Each week at Stockpickr, we look for the short-term catalysts and snapback plays that could move a stock in the coming days. Each Monday, I present these ideas in a

Rocket Stocks column

. Let's check in and update this week's

Rocket Stocks for the Week of September 17th-21st

portfolio.

I would sell

Lehman Brothers

(LEH)

, which is up some 10% since Monday when it appeared as Rocket Stock for this week. While earnings were good, the immediate, near-term catalyst is over, and it's time to move on.

I would also sell

Kohl's

(KSS) - Get Report

, which is up about 5%; Kohl's was a pure snapback play, and it worked.

I would also sell

Meritage Homes

(MTH) - Get Report

up about 14%. After the

Fed

cut rates by 50 basis points Tuesday, just about all of the homebuilders rallied hard. I believe that longer term, Meritage is the best-positioned homebuilder, and with a huge short position and insider buying could go a lot higher. But as a trade, I am in and out of these names once the catalyst has taken place.

This week's update also includes two additional stocks. Let's take a look at these new picks.

First up is

Countrywide Financial

(CFC)

. Right after the Fed cut rates, Countrywide CEO Angelo Mozilo was out talking up his company saying that he was "very bullish on our future." Countrywide also announced that it plans to double its number of branches. With a large short position, Countrywide shares could rally in the coming weeks well past the $20 range.

Also worth looking at is

Vaalco Energy

(EGY) - Get Report

, a small-cap oil stock. On Friday, Vaalco's board approved a $20 million buyback in common stock; this represents 10% of the company's current market cap. Down some 50% year to date, Vaalco sports a clean balance sheet with good growth.

Just in case you missed out so far on this week's rocket stocks, check out the

Rocket Stocks for the Week of September 17th-21st

portfolio.

Please note that due to factors including low market capitalization and/or insufficient public float, we consider Vaalco Energy to be a small-cap stock. You should be aware that such stocks are subject to more risk than stocks of larger companies, including greater volatility, lower liquidity and less publicly available information, and that postings such as this one can have an effect on their stock prices.

At the time of publication, Altucher and/or his fund had no positions in stocks mentioned, although positions may change at any time.

James Altucher is president of Stockpickr LLC, a wholly owned subsidiary of TheStreet.com and part of its network of Web properties, and a managing partner at Formula Capital, an alternative asset management firm that runs a fund of hedge funds. He is also a weekly columnist for

The Financial Times

and the author of

Trade Like a Hedge Fund

,

Trade Like Warren Buffett

and

SuperCa$h

. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Altucher appreciates your feedback;

click here

to send him an email.

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