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Top Rocket Stocks for the Week of Oct. 8

This promising China stock and Akamai could move higher.

Last week's

Rocket Stocks portfolio

highlighted companies that were bound to snap back. The portfolio contained

Valero Energy

(VLO) - Get Free Report

(up 2%),

First Solar

(FSLR) - Get Free Report

(up 6%) and

FreightCar America

(RAIL) - Get Free Report

(up 6%) among others.

Stocks that have solid fundamentals and high short positions always offer the potential for a snap-back rally.

This week we take a look at a few tech names and a few energy companies that all have potential catalysts to rocket higher. The catalysts this coming week are almost all bottom-fishing-related as well as some earnings plays.

For the entire list of stocks on this week's list as well as the analysis for each pick, check out the

Top 10 Rocket Stocks for the Week

at Stockpickr.

(By the way, do you need a new jet pack? Want to buy the nicest bottle of wine ever for the next time you cook dinner for your date? Want the coolest wristwear


? If so, check out today's

Good Life Blog Watch


But before I make any recommendations, let's see how last week's picks performed.

FreightCar, up 6% (a

midweek sell


Valero, up 1.5%

Tesoro Petroleum


, up 5%


(KSS) - Get Free Report

, up 7% (midweek sell)


(GM) - Get Free Report

, flat



, up 10% (mid-week sell)

First Solar, up 15% (midweek sell)

National Med Health Card



, down 4%

Lockheed Martin

(LMT) - Get Free Report

, up 1%

NPS Pharmaceuticals


, down 7%

First up is

Yum! Brands

(YUM) - Get Free Report

. The catalyst here is that YUM reports earnings today. Yum! has a diverse product base with incredible customer loyalty (loyalty or addiction?) to their products. With 60% of the American population severely overweight, YUM is the only pure play on an obese society.

With approximately 34,000 restaurants in 100 countries and $9.7 billion in annual revenue, YUM offers a lucrative business with both increasing margin expansion and sales.

With a P/E of 22 and quarterly earnings growth (year over year) of 14.1%, I consider YUM relatively cheap compared to its potential for international growth. There are some problems with its balance sheet and gross margins can certainly be worked on (consider the quality of the food). YUM is also a favorite of

Bill Nygren of the Oakmark Fund,

who has an aggressive position in the fast food restaurant.

Weekly catalyst for YUM!: It should rocket higher as international demand for its fast food is very strong. It reports after the close; look for them to beat on the top line and raise guidance.

Also worth looking at is a very speculative wireless Chinese company called

China GrenTech


, which manufactures and sells wireless coverage products and services to telecommunication operators inside China. All China-related stocks have been moving much higher within the last two weeks.



, which has been up as much as 75% in a single day, is in the same sector as GRRF. Trading at just 5X cash flows, GRRF has been left out of "China Rally" so far. Not sure that is going to last though.

Weekly catalyst: This is one of the few Chinese wireless companies that has yet to rally. Trading at just five times cash flows, this could spike soon as the story becomes better understood.

Next up is


(AKAM) - Get Free Report

, which has been in a tough slide now for almost three months. Right now the market feels as if AKAM is going to spend its way to bankruptcy and it certainly is very possible it does that (that is why we are seeing

F5 Networks

(FFIV) - Get Free Report

rally on the bad AKAM numbers).

However, AKAM has seen solid insider buying over the past two months, with the executive chairman of the board, George Conrades, buying a massive amount of stock in the mid 40s. They know much more than you or I would ever know about the innermost workings of AKAM and the future of their business in the overall internet sector. So with AKAM trading down as much as $15 a share from recent levels, it's worth a shot.

Weekly catalyst: Pure snap-back play, heavy insider buying $15 points higher suggests this could go higher.


(COP) - Get Free Report

had a bit of a pullback last week. Some people are calling that a double top, but I believe it's a great buying opportunity. COP has been a favorite stock on the Answers section on Stockpickr, with more posts coming in the past two weeks than NYX or SHLD. Stockpickr members know that while COP has moved massively this last month, it is still cheap compared to the sector as a whole. COP's multiple is still under 10 compared to a sector average of 12 times. With

Atticus Capital


Warren Buffett

behind COP, a slight pullback in oil and oil-related stocks is not going to cause a massive selloff. Last week Jim Cramer said that if COP hit $80, he would have to buy some.

As for the rest of the week's picks, I take a closer look at


(NTRI) - Get Free Report

and wonder if it's a snapback play. Is


(TTWO) - Get Free Report

a buy? As well as

Promerica Bank



BEA Systems



To find the snapbacks and potential breakouts on a regular basis, check out these Stockpickr portfolios, which I use in my own research each week.

The Daily Hot List

: This is the must-view portfolio midday each day to see whats making the biggest moves and why.

Always check the

biggest % losers from the day before.

They can snapback hard. When you check this list on Stockpickr, you can see which stocks are owned by the quality hedge funds and mutual funds. Pay attention to those. They will be buying at the lower prices, so you should be also.

Biotech Short Squeezes




and others can often be found in this category.

Ditto for the

52 week low list

. You must check the above two lists every day if you hope to find volatile stocks.

Stocks Rising on Unusual Volume.

These are stocks of potential breakouts.

Stockpickr's System Trades of the Day

: These are trades triggering that day in various backtested trading systems we've developed.

Stocks with unusual options activity the day before.

Perhaps someone knows something?

Latest Activist Situations

-- these are beaten-down stocks where hedge funds are accumulating and demanding change. Believe me, these hedge funds piggyback each other. And once they start rocking the boat, things happen quickly. This should be on the must-view list.

One final place to frequent is the Answers section on Stockpickr, where ideas such as those presented in this article are thrown around daily.

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 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



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

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