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Life can be cruel and unpleasant for many stocks at different periods. There are growing pains, missed earnings, misunderstood press releases and negative analyst views with which to contend. But sometimes the stocks that are in the worst doldrums snap back the hardest and then keep going.

Each week at Stockpickr.com, we search for those stocks that are in their worst throes of agony, with the thought that they can be ridden higher on a snap back. It's a smart technique for those playing stock-picking contests such as

TheStreet.com's

Beat the Street

because choosing stocks that have the catalysts to rise sharply in coming days can quickly boost a portfolio's value.

For this week's portfolio of 10 potential rocket stocks, I focused on names that make for both long-term buys and short-term plays on volatility.

To compile this week's list,

Contest Stocks VI

, I gleaned ideas from these Stockpickr portfolios:

  • Biggest % Losers, a list of the largest-percentage losers in terms of stock price. This list, which we update every day, is great for seeing not only why a stock is down so much but also what hedge funds and super investors might be accumulating shares.
  • 52-Week Lows, a select list of those names trading at their lows.
  • Stocks With Unusual Option Activity, a list of stocks showing unusually high option volume from the previous close.
  • 52-Week Highs, to get ideas about where the potential breakouts might be.
  • Top 10 Potential Short Squeezes, list of stocks with high short interest and high insider buying.

First up, let's look at

Dendreon

(DNDN)

, a biotech company that focuses on development of cancer-fighting drugs.

Consider the saying "Stocks, they either love 'em or they hate 'em." As for Dendreon, "they" certainly loved it for a few weeks, but now they hate it. The truth is somewhere in the middle.

I'm not a biotech expert, and my few long-term calls in the area -- including

Genitope

(GTOP)

, another cancer vaccine company, in early 2005 -- were disasters. What I do know can be summed up simply: Cancer vaccines are the wave of the future, and every cancer vaccine is different. Most important, these companies have a hell of a time getting through the Food and Drug Administration process. But one or more will, and they will make a lot of money when they do.

Dendreon got hit Monday by a

setback from the FDA

for its prostate cancer vaccine Provenge. And shares plummeted on the news.

People got too excited about Dendreon even though all of the warning signs were there. Now all of the short-term speculators are bailing. But the bailing has happened, and I expect at least a short-term snapback over the next week. Without knowing much about the fundamentals, I believe that based on where the stock now sits, buying Dendreon here could provide a nice return over the next few days.

Next up is

Whole Foods Market

( WFMI), another stock that had a rough week last week.

When the supermarket chain reported quarterly earnings last Wednesday, everything came in below estimates: revenue, margins, profits. You name it, Whole Foods blew it. But as Morgan Stanley noted in a research report that came out Thursday, the reduction in margins was largely a result of the fact that Whole Foods is opening up a lot of stores and that the depreciation costs are higher for new stores than for existing stores.

In other words, the company is expanding fast, and, if you throw in its pending acquisition of

Wild Oats

( OATS), it may very well dominate the organic space.

In fact, there's talk that the Federal Trade Commission may object to this merger of two rivals. Does a Whole Foods/Wild Oats merger create too much of a monopoly? Absolutely not. Whole Foods has competition coming from every angle.

Trader Joe's is my favorite organic supermarket (if you ever have the opportunity to buy bacon at Trader Joe's, or anything there for that matter, then do it.) But it's not just Trader Joe's --

Wal-Mart

(WMT) - Get Walmart Inc. Report

and

Target

(TGT) - Get Target Corporation Report

are also getting into the space.

TheStreet Recommends

However, as long the government stays out of it, Whole Foods has a successful future ahead of it. Short-term catalysts for the week include possible word from the FTC about the Wild Oats acquisition, and an upgrade from a bank if the stock gets too much lower. I'd buy here in the $41 range and hold for $45-plus within the next few weeks.

As you can see from the chart below, Whole Foods' stock had a rough week, but it wasn't on crazy volatility. I believe it's a safe bet that shares hang on in the worst-case scenario over the short term with a decent chance of getting back to $45 quickly.

Whole Foods Market (WFMI)

Finally, let's take a look at

Brocade Communications

(BRCD)

, a decent company in what is now a horrible industry: storage devices.

Cisco

(CSCO) - Get Cisco Systems, Inc. Report

,

Sun Microsystems

(SUNW) - Get Sunworks, Inc. Report

and

EMC

(EMC)

all reported dismal quarters, and now, to top it off, superstar Goldman Sachs analyst Laura Conigliaro has downgraded Brocade because of the weakness in the industry. The stock has gone straight down -- about 13% -- since her May 3 downgrade.

Brocade is not in bad shape. It has more than $500 million of cash in the bank and no debt. Plus, analysts still, on average, expect Brocade to have a forward price-to-earnings of just 14 based on earnings estimates for next year. Even Goldman Sachs reiterated an $11 price target.

Brocade reports earnings in a few weeks -- May 31 -- and I believe we can see a small run-up into earnings before then, at least into the mid-$9 range, which is 5% to 7% higher than where we are now. I also believe we can see unplanned upside in terms of the speed by which it has assimilated its McData acquisition.

We've seen this profile type before: a lot of cash, decent profitability, no debt. And as is often the case with such a stock, a little super fund named

Renaissance Technologies

can be found lurking around; it's no different here.

For the other stocks that are posied for a potentially big move this week, check out

Contest Stocks VI

or any of the Stockpickr portfolios I used to prepare this list.

Also, if you haven't checked it out yet, please try out our newest feature

Stockpickr Answers

. You can ask questions and answer them, and you can see the

"Top analysts"

as well as

Jim Cramer's latest answers

.

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 several quantitative-based hedge funds as well as a fund of hedge funds. He is also the author of

Trade Like a Hedge Fund

and

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;

click here

to send him an email.

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