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If you like to consider technical indicators in your investment decisions, looking to short sellers and institutional investors can help support what you see on the charts.

We ran a screen with that idea in mind. We looked for micro-cap stocks that are technically oversold, with RSI(14) below 40. Among that universe we then searched for those that have also seen significant net buying from institutional investors over the current quarter, as well as large decreases in shares shorted month-over-month (a bullish trend). This produced 12 stocks, listed below.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for six of the stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.


The smart money seems to like these names – what do you think? Use this list as a starting-off point for your own analysis.

List sorted by market cap.

1. NorthStar Realty Finance Corp. (NYSE:NRF):
Market cap at $297.84M. Institutional investors have been net buyers of 4.0M shares, which represents 5.25% of the company's 76.24M share float. Shares shorted have decreased from 6.41M to 6.15M, representing 0.34% of the company's 76.24M share float. Using the RSI(14) as an indicator, the stock appears oversold at a level of 33.98.



2. IMRIS, Inc. (NASDAQ:IMRS):
Market cap at $287.54M. Institutional investors have been net buyers of 882.1K shares, which represents 3.46% of the company's 25.46M share float. Shares shorted have decreased from 181.08K to 175.08K, representing 0.02% of the company's 25.46M share float. Using the RSI(14) as an indicator, the stock appears oversold at a level of 26.13.



3. Winnebago Industries Inc. (NYSE:WGO): Market cap at $267.03M. Institutional investors have been net buyers of 1.8M shares, which represents 6.62% of the company's 27.18M share float. Shares shorted have decreased from 4.79M to 4.78M, representing 0.04% of the company's 27.18M share float. Using the RSI(14) as an indicator, the stock appears oversold at a level of 34.21.

4. MaxLinear, Inc. (NYSE:MXL): Market cap at $259.46M. Institutional investors have been net buyers of 2.5M shares, which represents 14.93% of the company's 16.75M share float. Shares shorted have decreased from 742.14K to 707.47K, representing 0.21% of the company's 16.75M share float. Using the RSI(14) as an indicator, the stock appears oversold at a level of 36.94.

5. NN Inc. (NASDAQ:NNBR): Market cap at $218.74M. Institutional investors have been net buyers of 1.5M shares, which represents 9.14% of the company's 16.42M share float. Shares shorted have decreased from 110.62K to 50.06K, representing 0.37% of the company's 16.42M share float. Using the RSI(14) as an indicator, the stock appears oversold at a level of 37.95.

6. Ultra Clean Holdings Inc. (NASDAQ:UCTT):
Market cap at $194.06M. Institutional investors have been net buyers of 2.1M shares, which represents 12.95% of the company's 16.22M share float. Shares shorted have decreased from 1.36M to 1.30M, representing 0.37% of the company's 16.22M share float. Using the RSI(14) as an indicator, the stock appears oversold at a level of 37.21.

7. Convio, Inc. (NASDAQ:CNVO):
Market cap at $188.59M. Institutional investors have been net buyers of 2.2M shares, which represents 22.82% of the company's 9.64M share float. Shares shorted have decreased from 215.63K to 210.18K, representing 0.06% of the company's 9.64M share float. Using the RSI(14) as an indicator, the stock appears oversold at a level of 34.58.

8. Graham Corp. (NYSE:GHM): Market cap at $183.76M. Institutional investors have been net buyers of 870.2K shares, which represents 9.14% of the company's 9.52M share float. Shares shorted have decreased from 367.33K to 357.30K, representing 0.11% of the company's 9.52M share float. Using the RSI(14) as an indicator, the stock appears oversold at a level of 34.15.

9. Kongzhong Corp. (KONG): Market cap at $174.04M. Institutional investors have been net buyers of 530.4K shares, which represents 8.22% of the company's 6.45M share float. Shares shorted have decreased from 489.64K to 404.53K, representing 1.32% of the company's 6.45M share float. Using the RSI(14) as an indicator, the stock appears oversold at a level of 30.89.

10. ChinaCache International Holdings Ltd. (NASDAQ:CCIH):
Market cap at $171.19M. Institutional investors have been net buyers of 1.5M shares, which represents 22.97% of the company's 6.53M share float. Shares shorted have decreased from 1.01M to 746.58K, representing 4.03% of the company's 6.53M share float. Using the RSI(14) as an indicator, the stock appears oversold at a level of 29.08.

11. Hovnanian Enterprises Inc. (NYSE:HOV): Market cap at $163.75M. Institutional investors have been net buyers of 11.5M shares, which represents 16.98% of the company's 67.71M share float. Shares shorted have decreased from 16.78M to 15.50M, representing 1.89% of the company's 67.71M share float. Using the RSI(14) as an indicator, the stock appears oversold at a level of 29.1.

12. Global Education & Technology Group Limited (NASDAQ:GEDU): Market cap at $120.95M. Institutional investors have been net buyers of 440.9K shares, which represents 5.70% of the company's 7.74M share float. Shares shorted have decreased from 19.02K to 17.94K, representing 0.01% of the company's 7.74M share float. Using the RSI(14) as an indicator, the stock appears oversold at a level of 37.38.

*Institutional data sourced from Fidelity, short data sourced from Yahoo! Finance, all other data sourced from Finviz.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: 12 Oversold Micro-Cap Stocks With Short Covering and Institutional Buying