Down Too Long? 5 Top Sale Stocks

One of the best, though somewhat counter-intuitive, tools among our TradingMarkets Stock Indicators is the Stocks Down 10% or More list. This indicator scans our database for stocks that are trading above their 200-day moving average, but are down 10% or more over the past five days.

While new highs and breakouts often get stock traders salivating, our research shows that stocks that have fallen 10% or more over the past five days while remaining above their 200-day moving average actually have shown positive returns over one-day, two-day and one-week time periods. In fact, our research revealed that stocks displaying short-term weakness actually outperform stocks displaying short-term strength.

On Tuesday, there were five stocks at the top of this list of "stocks on sale" that traders should study and consider when looking to exploit short-term weakness. Ranging in dollar value from $8 to $80, these stocks are displaying the kind of short-term pain that can result in positive gains for traders willing to zig while the rest of the pack zags.

All of the following stocks feature PowerRatings (for Traders) ratings of at least 9.

Chindex International (NasdaqCM: - ). This American healthcare company provides services and products for the Chinese market, including Hong Kong. CHDX has a PowerRating (for Traders) rating of 9. CHDX also appears on our bullish list of stocks that have experienced five or more consecutive lower lows while remaining above their 200-day moving average.

Cleveland Cliffs (NYSE: - ). Cleveland Cliffs is an international mining company that specializes in iron ore pellets and providing metallurgical coal to the steelmaking industry. The stock has a PowerRating (for Traders) rating of 9. CLF can also be found on our bullish list of stocks that have experienced five or more consecutive lower lows while remaining above their 200-day moving average.

Stratasys (NasdaqGS: - ). Stratasys is a manufacturer of office-based prototyping and manufacturing systems and 3D printers. SSYS has a PowerRating (for Traders) of 9. In addition to appearing on our bullish list of stocks down more than 10% while above their 200-day moving average, Stratasys also made our bullish list of stocks with a 2-period RSI (Relative Strength Index) under two.

Itron (NasdaqGS: - ). This technology company provides metering, data collection and other services to global energy and water industries. The stock has a PowerRating (for Traders) of 9.China Technology Development Group (NasdaqCM: - ). This Chinese alternative energy company makes its money from providing technology and network security for the Chinese solar energy market. The lowest priced stock in dollar terms in this list, CTDC has a PowerRating (for Traders) of 9. Like Stratasys (SSYS), China Technology Development Group also made our bullish list of stocks with a 2-period RSI under two.

5 Top Fire Sale Stock Recap

Chindex International (CHDX): Down 10% or more. 5+ Consecutive Lower Lows.

Cleveland Cliffs (CLF): Down 10% or more. 5+ Consecutive Lower Lows.

Stratasys (SSYS): Down 10% or more. 2-Period RSI Below Two.

Itron (ITRI): Down 10% or more.

China Technology Development Group (CTDC): Down 10% or more. 2-Period RSI Below Two.

David Penn is Senior Editor at TradingMarkets.com.