The worst performing stocks in the S&P 500 during the most recent pullback have reversed their downtrend, outperforming the gains in the overall index by nearly 5% in the past five trading sessions.
After the S&P 500 closed at a 16-month high on January 19, 2010, stocks retreated 8.85% until February 8, leading many investors to assume a market correction was in place. Since February 8, however, the market has recovered nearly half of its losses, gaining 3.61% as of the close yesterday.
In the period between January 19 and February 8, the average loss for the 35 worst performing stocks in the S&P 500 was 19.3%. The same 35 stocks, are now up an average of 8.4% in the past five trading days, erasing nearly half of their losses during the market pullback.
Extreme swings can help point to oversold or overbought conditions, as was the case with some of these losers turned winners.
Indeed, about a third of the stocks currently leading the gains since February 8, were among the worst performers during the market pullback. These stocks are highlighted in blue in the table below.
American International Group , for example, is up 23.78% since February 8, following a 21.56% drop from January 19 to February 8.
Note that many of the companies below with the largest percent gains are energy and basic material plays, which are correlated to increases or decreases in the price of commodities and the value of the US dollar.
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