Unusual times call for unusual measures ... and I think a bear market qualifies as unusual times.

In a bullish or even neutral environment, basic fundamental analysis can help you find solid opportunities. In a bear market though, the rules change. Undervalued stocks can become more undervalued, as the falling tide pulls down even the best of equities. Logical or fair? No, and no. However, that doesn't change the fact that a long-only investor loses money if one or more of their stocks sink.

I suggest an alternative approach in a rough market...one that may be a little unusual, though certainly simple. Rather than starting a search for undervalued companies, why not start your search by finding stocks that are actually moving higher?

I know, I know...it sounds like I've crossed over into the world of technical analysis. Well, maybe a little, but for a good reason. I can cross back into the fundamental world though, by further narrowing the field to just those companies with solid fundamentals. The result is the best of both schools of thought. (To learn how this method can help investors increase profits, check out Blending Technical And Fundamental Analysis.)

If you'd still rather let someone do the digging for you, no problem. I've narrowed a short list of rising stocks into an even shorter list of four stocks, simply by eliminating any tickers of poorly-performing companies. Here are the survivors:

Family Dollar Stores
Some recent retail sales reports have been disappointing; J.C. Penney (NYSE:JCP), Dillard's (NYSE:DDS) and Nordstrom (NYSE:JWN) all struggled in June. Value retailers, however, have actually thrived on being able to cater to money-conscious consumers. Take Family Dollar Stores (NYSE:FDO) as an example. In June, same store sales were up 8%, and total monthly revenue was up 10.7%. The stock hit new highs for the year this week, and has gained 8.7% since early May.

If we're truly in a bear market, you sure wouldn't know it by looking at shares of ViroPharma (Nasdaq:VPHM). The stock is up 42.9% year-to-date. However, there's still plenty of room between the current price of $11.98 and last year's high around $18.

What gives? Since ViroPharma is a one-trick pony, err, one-drug company, the market's concern has been that a generic pharma company could develop the equivalent of ViroPharma's antibiotic Vancocin. The patent expired years ago. More recently, though, Vancocin worries have been eased. It's now believed the FDA will require any similar drug to be proven to act as the equivalent to Vancocin and not just perform comparably to it.

The market doesn't seem to think that's likely to happen anytime soon. (To learn how to find healthy drug companies, read Measuring The Medicine Makers.)

Although the 4% gain over the last two months isn't exactly stellar, Rent-a-Center's (Nasdaq:RCII) performance helps sweeten the pot. The company swung to a loss in calendar Q4 of last year, but got back in the black in Q1 of this year, and investors have slowly trickled back into the stock.

Rent-a-Center is the second largest rent-to-own outfit in the United States. The common theory is that the credit crisis and slowing economy have been a blessing for companies like Rent-a-Center. Consumers who can't afford to buy outright should be flocking to these rental-to-own alternatives. After a disappointing 2007, there's lots of room for improvement. That's the attraction.

The9 Limited
Although it's up by 21.4% in the just the last two months, The9 Limited (Nasdaq:NCTY) is still well under July's peak around $35.00, which leaves plenty more room for recovery. The current price is about $25.60.

You may not know the company, but odds are you know something about what it does do. Perhaps you've heard of a little 10-million-subscriber online adventure game called "World of Warcraft"? The9 Limited is licensed to operate the subscription-based sensation to Chinese gamers. The company's growth rate has been tremendous. Earnings are up by 35.7% on a YOY basis, and revenue is up 62.7%, also on a YOY basis. The upcoming addition of online game "Audition 2", and the World of Warcraft expansion "Wrath of the Lich King" should further enhance growth.

Parting Thoughts
Do you see any common elements in these four stocks? From my point of view, they're all "distressed economy" beneficiaries, or immune to economic woes including The9 Limited.

Even if you're not a fan of these particular stocks, I think you'll find comparable strength in each of their particular industries. More importantly, I think you're more apt to find rising stocks in each of their industries. And that really is the point, isn't it?

For related reading, check out Recession-Proof Your Portfolio.

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