Tech has gotten the short end of the stick over the past few weeks, with major growth plays experiencing significant pullbacks. A lot of the blame as of this week can be lain at the feet of Twitter (TWTR) , who have seen shares plunge nearly 50 percent over the last month and over 25 percent in just the last two weeks alone.
Coupled with a draw down on the solar sector, the biggest tech growth plays have sparked a broad sell-off in tech in general, with name players like David Einhorn calling out “echo chamber” stocks in tech. The result of this has been more investors seeking solace in the less exciting but more traditionally safer blue chip plays.
Of course, the market is never one to operate rationally. Every sell-off is not necessarily warranted. And while the tech sector as a whole might be experiencing a dip as a reaction to previous over-exuberance, there are still growth plays with strong fundamentals that have possibly been oversold by the market, and are thus fundamentally, and technically, poised to make a comeback.
METHODOLOGY
To find small-cap growth tech plays with a strong chance of rebound, we started with the 67 tech plays included in the Equities.com Small-Cap Stars project. Those being the 67 tech companies that possessed the fundamental qualities we feel gives a business a string chance of succeeding.
We then looked for whether any of those 67 had an RSI of 20 or below. An RSI, or relative strength index, rating of below 30 indicates that the company is oversold, with 20 or below suggesting it is highly undervalued.
FINDINGS
We found 4 companies that fit the bill, meeting the Tech sector-specific fundamental criteria of the Small-Cap Stars project, while possessing an RSI under 20, indicating the stock has been unjustly treated by the market.
Those four companies are:
Extreme Networks Inc. (EXTR)
Price: $3.95
RSI: 16.59
CalAmp Corp (CAMP)
Price: $16.20
RSI: 18.23
SciQuest Inc. (SQI)
Price: $17.08
RSI: 19.76
Aviat Networks (AVNW)
Price: $1.09
RSI: 19.83
