Kapitall Strategies: Evaluating the Rebound Potential of Today's Biggest Losers

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(List compiled by Eben Esterhuizen, CFA)

Strategy: If a stock is down more than 3% since yesterday's close, buy it, and sell it on the close 10 trading sessions later.

But which stocks seeing losses today might be good candidates for this strategy?

To help you get ideas, we started with a universe of about 200 stocks that have declined by more than 3% since yesterday's close (i.e. strategy candidates).

We went back in time, and evaluated how many times these stocks rebounded from similar losses over the last quarter.

For each backtested rebound strategy, we'll also report the average return made on the investment (ignoring transaction costs).

Recent history suggests that these stocks are resilient, and may rebound from today's sell-off. That said, it's important to point out that past performance is no guarantee of future results.

In other words, just because these stocks rebounded from similar losses over the last quarter, there is no guarantee that they will do so again today.

As always, use this list only as a starting point for your own analysis.

For each stock listed, we'll also include the annual performance.

Analyze These Ideas (Tools Will Open In A New Window)

1. Access a thorough description of all companies mentioned
2. Compare analyst ratings for all stocks mentioned below
3. Visualize annual returns for all stocks mentioned

1. Great Panther Silver Ltd (GPL): Silver Industry. At time of writing (12:30pm ET), the stock is down 4.92% since yesterday's close. Over the last quarter, there have been 15 days when the stock lost more than 3% in a session. Trading the above mentioned strategy on those days would have returned an average of 10.05% over the next 10 trading days. The stock has returned 335.71% over the last year.

2. Sina Corp. (SINA): Internet Software & Services Industry. At time of writing (12:30pm ET), the stock is down 7.48% since yesterday's close. Over the last quarter, there have been 14 days when the stock lost more than 3% in a session. Trading the above mentioned strategy on those days would have returned an average of 9.23% over the next 10 trading days. The stock has returned 150.12% over the last year.

3. ICICI Bank Ltd. (IBN): Foreign Regional Banks Industry. At time of writing (12:30pm ET), the stock is down 4.48% since yesterday's close. Over the last quarter, there have been 1 days when the stock lost more than 3% in a session. Trading the above mentioned strategy on those days would have returned an average of 8.09% over the next 10 trading days. The stock has returned 6.31% over the last year.

4. Augusta Resource Corp. (AZC): Industrial Metals & Minerals Industry. At time of writing (12:30pm ET), the stock is down 4.07% since yesterday's close. Over the last quarter, there have been 8 days when the stock lost more than 3% in a session. Trading the above mentioned strategy on those days would have returned an average of 7.46% over the next 10 trading days. The stock has returned 106.93% over the last year.

5. Lululemon Athletica Inc. (LULU): Textile - Apparel Clothing Industry. At time of writing (12:30pm ET), the stock is down 4.71% since yesterday's close. Over the last quarter, there have been 3 days when the stock lost more than 3% in a session. Trading the above mentioned strategy on those days would have returned an average of 7.28% over the next 10 trading days. The stock has returned 206.49% over the last year.

6. Gulfport Energy Corp. (GPOR): Independent Oil & Gas Industry. At time of writing (12:30pm ET), the stock is down 4.39% since yesterday's close. Over the last quarter, there have been 7 days when the stock lost more than 3% in a session. Trading the above mentioned strategy on those days would have returned an average of 6.92% over the next 10 trading days. The stock has returned 141.59% over the last year.

7. Datalink Corp. (DTLK): Business Software & Services Industry. At time of writing (12:30pm ET), the stock is down 4.56% since yesterday's close. Over the last quarter, there have been 8 days when the stock lost more than 3% in a session. Trading the above mentioned strategy on those days would have returned an average of 5.56% over the next 10 trading days. The stock has returned 233.85% over the last year.

8. Lydall Inc. (LDL): Conglomerates Industry. At time of writing (12:30pm ET), the stock is down 3.97% since yesterday's close. Over the last quarter, there have been 9 days when the stock lost more than 3% in a session. Trading the above mentioned strategy on those days would have returned an average of 4.98% over the next 10 trading days. The stock has returned 47.21% over the last year.

9. Baidu, Inc. (BIDU): Internet Information Providers Industry. At time of writing (12:30pm ET), the stock is down 5.39% since yesterday's close. Over the last quarter, there have been 9 days when the stock lost more than 3% in a session. Trading the above mentioned strategy on those days would have returned an average of 3.96% over the next 10 trading days. The stock has returned 71.48% over the last year.

10. Harvest Natural Resources Inc. (HNR): Independent Oil & Gas Industry. At time of writing (12:30pm ET), the stock is down 6.59% since yesterday's close. Over the last quarter, there have been 8 days when the stock lost more than 3% in a session. Trading the above mentioned strategy on those days would have returned an average of 3.83% over the next 10 trading days. The stock has returned 49.18% over the last year.




The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.




This article appears in: Investing , Investing Ideas , Stocks

Referenced Stocks: APSA , AVAV , KB , PII

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