Below is a list of 10 stocks under $10 trading near 240 day highs as of Friday's close. While well more than 10 stocks under $10 traded at a 240 day high on Friday, this list was chosen based on their quality/value/growth rating from stockscreen123.
Additional criteria were:
- over-the-counter stocks were excluded
- share price was higher than $.50
- average share volume the past 20 days was over 25,000 shares
- no one position would constitute more than 10% of the portfolio's value when rebalancing. This is a useful criteria for preventing one or two stocks to dominate the portfolio and skew results when less than 10 stocks met the criteria.
This strategy is highly speculative and volatile. One option would be to hedge the strategy by shorting the Russell 2000, using bearish option strategies, or only using the strategy when the Russell 2000 is above a long term moving average. It would also be prudent to use money management or stop loss techniques or more in-depth trading strategies such as one I detailed here. However, an unhedged investment in this strategy dating to March 2001, rebalancing every 4 weeks, and allowing for .5% slippage results in 1500%+ return versus just over 50% return in the Russell 2000. Dividends and commissions are excluded in both return results. The 3 year returns are 41%+ versus a loss of approximately 15% on the Russell 2000 (second image).
Below is the current list of qualifying stocks as well as a return chart for this strategy:
|MDF||Metropolitan Health Networks,||Here||2.98|
|MPAA||Motorcar Parts of America, In||Here||6.56|
|BGCP||BGC Partners, Inc.||Here||6.36|
|ISSI||Integrated Silicon Solution,||Here||9.67|
|OMN||OMNOVA Solutions Inc.||Here||8.01|
|SBH||Sally Beauty Holdings, Inc.||Here||8.95|
|SMOD||SMART Modular Technologies||Here||8.14|
|SCI||Service Corporation Internati||Here||9.08|
|FSS||Federal Signal Corporation||Here||9.15|
Disclosure: No positions in stocks mentioned