May 30 2014, 2:49pm CDT | by Forbes
The first five months have felt like tough sledding in the equity markets and yet the S&P 500 wraps up May sitting at all-time highs. It has been a grind moving to those levels though, and some widely-followed stocks have illustrated the market swings.
Bespoke Investment Group points out Friday that even as volatility measures like the VIX have been downright docile this year, plenty of stocks have experienced significant swings. Momentum” stocks have been at the fore of what limited volatility there has been, and Bespoke highlighted a few dozen that bore the brunt of the market’s stumble starting in early March that have bounced back since the beginning of May. (See “Goldman Warns Growth Chasers The Party Won’t Last Forever.”)
Netflix is one of 51 stocks in the S&P 1500 index identified by Bespoke that have rebounded at least 10% since May 8 on the heels of a decline greater than 10% starting with the March 6 downdraft (see table below). The video streaming service is up 28% over the former period after falling 29% during the latter, and had just four losing days in May.
Another name on Bespoke’s list is Facebook, which fell almost 20% from March 6 to May 8, but has perked up to the tune of a 10.5% gain since. Priceline.com meanwhile, is up 15% since May 8, following a 19% slide in the prior two months.
Not all of the companies that fit the mold are high-fliers. Barnes & Noble has caught a 12% bounce after falling 23%, while Rubicon Technology has recovered 18% but still sits sharply below its 50-day moving average because of its earlier 51% drop.
Few companies mentioned by Bespoke note illustrate the point more than Rackspace Hosting. The provider of cloud computing services dropped nearly 30% over the early March-early May period, before rallying back 36%.
According to Bespoke stocks like Rackspace could be prime targets for fresh pullbacks if markets turn south, with May gains pushing them back above 50-day moving averages. Such moving averages can often act like magnets for stretches of time, especially when stocks are ping-ponging above and below those technical levels.
On the flipside, stocks that have made comebacks but still sit below their 50-day — names on the list like clinical data software firm Medidata Solutions and surplus marketplace Liquidity Services — could be in the midst of a bounce with longer legs, though both declined Friday to finish May with a losing session.
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