Nothing Beta for a Trend

What's the shortest route to quick gains in an uptrending (or downtrending) or oversold (or overbought) market? The first thing that comes to mind is volatility so let's do a beta search and then combine it with the following parameters: price between $5 and $20, and current volume greater than one million shares. We'll use a minimum beta requirement of no less than 3.

Beta, as you know by now, is a measure of a stock’s price volatility in relation to the rest of the market. The whole market is assigned a beta of 1. Using a beta of 3 for this search should provide us with some hot stocks that move in the direction of the market with a greater amplitude without considering other unique factors that could affect an individual stock's price.

Here's what the "BETAlator" came up with for this low priced group in order of highest to lowest beta:

CAR, Avis Budget Group, 5.31
PIR, Pier One Imports, 4.97
DAN, Dana Corp., 4.22
MGM, MGM Resorts, 4.03
CENX, Century Aluminum, 3.66
ARM, Arvinmeritor, 3.58
CBL, CBL and Assoc., 3.58
MTG, MGIC Invest., 3.12
RDN, Radian Group, 3.09
YGE, Yingli Green Energy, 3.04

Keep in mind that as the market turns downward, these stock will generally do the same...sometimes with vengeance. This can be a good thing for those who play the short side of the market, and a not so good thing for those who don't get out of the way.