The sudden 8% pullback in the S&P 500 has moved the index into oversold territory and brought a large number of stocks down its level. This selling led me to run a scan that identified stocks that remain above their 50-day moving average and have RSI readings below 30.
Investopedia Broker Guides: Enhance your trading with the tools from today's top online brokers.

A stock that trades above its 50-day moving average is typically considered to be in an uptrend due to the recent strength of the stock price. An RSI below 30 indicates a stock is oversold and the likelihood of a bounce is increasing. When the two are combined, it results in a stock that is in an uptrend, but at the same time oversold. Sounds like a high reward-to-risk setup. Below are four stocks that meet the criteria highlighted.

SEE: An Introduction To The Relative Strength Index

Food and Beverage
The Coca-Cola Company (NYSE:KO) has pulled back nearly 5% from its recent 13-year high and is sitting on the 50-day moving average at $74 per share. The iconic company sells non-alcoholic beverages around the globe and has consistently been one of the most recognizable brands in the world. The stock is in the consumer staple sector, which has been holding up well during the recent market pullback. With a dividend yield of 2.7%, it adds to the allure of the company. The one caveat is the PEG ratio, which is roughly 2.37, higher than most buy candidates.

Susser Holdings (Nasdaq:SUSS) operates convenience stores in New Mexico, Texas, and Oklahoma under the Stripes brand name. The stock has been a big winner over the last year and is now down about 6% from an all-time high set two weeks ago. A PEG ratio of 1.80 is more acceptable than that of KO and the location of the stores make the company an interesting investment option. Consider the energy boom in the three states mentioned and it is not surprising, the stock is doing so well. The 50-day moving average is at $26.80.

Fundamentally Strong
GNC Holdings
(NYSE:GNC) broke its 50-day moving average intraday last week, but has been able to close above the important support level that is currently at $36.45. The specialty retailer sells health and wellness products that include vitamins as well as sports and diet products. The chart combined with the PEG ratio of around 0.95 make the stock an attractive opportunity after pulling back roughly 6% from an all-time high. The stock also pays a modest 1.2% dividend.

SEE: Why Dividends Matter

High Dividend
Sempra Energy
(NYSE:SRE) is a worldwide energy services company that provides energy-related services to approximately 31 million customers around the globe. The company boasts a 3.7% dividend yield and trades with a PEG ratio of 2.18. The stock is only down 3% from a multi-year high and is holding above the 50-day moving average of $62.44. A bonus for SRE is that one of its divisions deals with liquefied natural gas (LNG), which could be the future for natural gas power.

The Bottom Line
Because the stocks have already pulled back from highs and have a distinct support level, determining the stop-loss area should be fairly easy. In general, a stop-loss a few percentage points below the 50-day moving average will be appropriate. The pullback from the high lowers the risk, as the stock is closer to support, and at the same time increases the reward potential because the entry price is lower. Another win-win for the investor.

Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!

At the time of writing, Matthew McCall did not own shares in any of the companies mentioned in this article.
Related Articles
  1. Chart Advisor

    ChartAdvisor for November 27 2015

    Weekly technical summary of the major U.S. indexes.
  2. Chart Advisor

    Pay Attention To These Stock Patterns Playing Out

    The stocks are all moving different types of patterns. A breakout could signal a major price move in the trending direction, or it could reverse the trend.
  3. Chart Advisor

    Now Could Be The Time To Buy IPOs

    There has been lots of hype around the IPO market lately. We'll take a look at whether now is the time to buy.
  4. Stock Analysis

    Why did Wal-Mart's Stock Take a Fall in 2015?

    Wal-Mart is the largest company in the world, with a sterling track-record of profits and dividends. So why has its stock fallen sharply in 2015?
  5. Stock Analysis

    Allstate: How Being Boring Earns it Billions (ALL)

    A summary of what Allstate Insurance sells and whom it sells it to including recent mergers and acquisitions that have helped boost its bottom line.
  6. Chart Advisor

    Copper Continues Its Descent

    Copper prices have been under pressure lately and based on these charts it doesn't seem that it will reverse any time soon.
  7. Technical Indicators

    Using Pivot Points For Predictions

    Learn one of the most common methods of finding support and resistance levels.
  8. Options & Futures

    Cyclical Versus Non-Cyclical Stocks

    Investing during an economic downturn simply means changing your focus. Discover the benefits of defensive stocks.
  9. Investing Basics

    How to Deduct Your Stock Losses

    Held onto a stock for too long? Selling at a loss is never ideal, but it is possible to minimize the damage. Here's how.
  10. Chart Advisor

    Watch These Stocks for Breakouts

    These four stocks are moving within price patterns of various size, shape and duration, and are worth watching for a breakout
  1. What are some of the most common technical indicators that back up Doji patterns?

    The doji candlestick is important enough that Steve Nison devotes an entire chapter to it in his definitive work on candlestick ... Read Full Answer >>
  2. How do dividends affect retained earnings?

    When a company issues a cash dividend to its shareholders, the retained earnings listed on the balance sheet are reduced ... Read Full Answer >>
  3. Tame Panic Selling with the Exhausted Selling Model

    The exhausted selling model is a pricing strategy used to identify and trade based off of the price floor of a security. ... Read Full Answer >>
  4. Point and Figure Charting Using Count Analysis

    Count analysis is a means of interpreting point and figure charts to measure vertical price movements. Technical analysts ... Read Full Answer >>
  5. What assumptions are made when conducting a t-test?

    The common assumptions made when doing a t-test include those regarding the scale of measurement, random sampling, normality ... Read Full Answer >>
  6. What is the difference between called-up share capital and paid-up share capital?

    The difference between called-up share capital and paid-up share capital is investors have already paid in full for paid-up ... Read Full Answer >>

You May Also Like

Trading Center