Stocks down big as of Monday morning include a quartet of 8-rated stocks and one 10-rated stock--all of which are likely to outperform the average stock over the next few days.

One of the great things about a market sell-off, which is what we experienced on Friday, is that in addition to ruining the day of many an overbought stock, sell-offs tend to help bring the good stocks down to a level where they can be purchased as bargains.

So often, traders and active investors will look at a stock and tell themselves, "Wow, I wished I would have bought into that stock days ago!" Unfortunately, the pressure of this realization often leads traders to start chasing stocks that have already moved up or down a great deal. Trades like this are often disastrous, because the move in the stock has already happened by the time the trader--who needed to see the stock move BEFORE he or she felt confident enough to take a position--climbs on board.

Instead, we encourage traders to seek out ways of buying stocks before the big move happens. And one way to do that is to buy stocks after a big move IN THE OTHER DIRECTION had occurred.

TradingMarkets veteran trader Steve Primo has described it as needing a correction that is big enough to get a powerful response. As far as Primo is concerned, stocks that get hit big, are the same stocks that bounce back big. If you are a pullback swing trader, if you want to buy weakness and sell strength, then your takeaway from Primo is not only that big "hits" lead to big bounces, but the bigger the hit, the bigger the bounce. As Primo put it in one article, a stock needs something significant to react against. And a sharp pullback or aggressive correction is often what is needed to do the trick.

That leads us to TradingMarkets Monday Stock Movers: stocks that are up or down by 10% or more over the past few days as of the Friday close. This week's Monday Stock Movers consists of five stocks that have been down by 10% or more.

A pullback of 10% or more in a short period of time such as a few days is precisely the kind of big "hit" that often results in a big bounce from a stock. As long as the stock in question is trading above the 200-day moving average, then the more selling a stock experiences, the more likely we are to be interested in buying it as it "comes in."

Our research into stocks that have lost 10% or more in a short period of time backs up this posture. We found, after analyzing millions of short term stock trades, that stocks that were trading above their 200-day moving averages and had experienced a decline of 10% or more, had actually outperformed the average stock in one-day, two-day and one-week timeframes.

Click here to read our research into stocks that are down by 10% or more in a few days' time.

Four of the stocks in today's report, as I mentioned above, have Short Term PowerRatings of 8. Stock with Short Term PowerRatings of 8, according to our research, have outperformed the average stock by a margin of more than 8 to 1 after five days. Our sole 10-rated stock, by comparison, belongs to that class of stocks that have bested the average stock by a margin of approximately 16.9 to 1 over the same, short term, time frame.

Note also the variance in 2-period Relative Strength Index (RSI) values among these oversold stocks--from an RSI near 20 to a RSI that is actually less than one.

Cirrus Logic (CRUS | Quote | Chart | News | PowerRating). Short Term PowerRatings 10. RSI(2): 3.99

The Medicines Company (MDCO | Quote | Chart | News | PowerRating). Short Term PowerRating 8. RSI(2): 1.16

Omega Protein (OME | Quote | Chart | News | PowerRating). Short Term PowerRatings 8. RSI(2): 3.98

Rick's Caberet International (RICK | Quote | Chart | News | PowerRating). Short Term PowerRatings 8. RSI(2): 0.562

Valence Technology (VLNC | Quote | Chart | News | PowerRating). Short Term PowerRatings 8. RSI(2): 18.90

Tired of losing money trading breakouts and breakdowns? Our special, Free Report, "5 Secrets to Short Term Stock Trading" will show you some of the key strategies and attitudes that traders throughout history have used to determine the right time to buy and the right time to sell. Click here to get your free copy of "5 Secrets to Short Term Stock Trading"--or call us today at 888-484-8220.

David Penn is Senior Editor at TradingMarkets.com.