Although the market is preoccupied with the political battle in Washington, many stocks have been ignoring the debate and performing well. Trades in these small-caps names have to be managed carefully, but they can pay off big. BitAuto (BITA), which I highlighted as my Stock of the Week before the market open last Monday, was up about 19% this week, for example.
Few big-caps will make moves of that magnitude so quickly; however, with big potential comes increased risk, and that must be managed. It is extremely important to have disciplined stops and a plan to take profits if a trade works. With that in mind, consider the following small-cap plays.
NQ Mobile (NQ) is a China-based mobile security provider that is expanding into other markets. It doesn't have the best chart but I like the story and its potential, which I believe will develop over time.
BioTelemetry (BEAT) provides remote cardiac monitoring and is a play on wireless technology in the medical-equipment sector. It has been gaining steam as it has enjoyed better insurance reimbursement and is starting to employ its technology in areas other than cardiology. It is one of my favorites and I'm looking for it to move soon.
Pacific Biosciences of California (PACB) recently spiked higher after announcing a deal with Roche (RHHBY) for use of a gene-sequencing system in in-vitro diagnostics. Analysts believe more deals are coming and have increased their target prices. The stock is consolidating and I'm looking for another leg up.
Kandi Technologies (KNDI) is a Chinese manufacturer of electric vehicles. It is somewhat controversial and has been the subject of battles between bulls and bears. I'm not sure what the truth is about the fundamentals but the setup suggests the potential for a decent spike, especially if shorts press too hard and get squeezed. Look for a move higher to force short covering and bring in aggressive chasers.