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You don’t need me to tell you how poorly the once-proud stocks of GNK and RIMM have acted over the past few years. Technically, they have been in well-defined downtrends, with bottom-pickers being smashed into oblivion the whole way down. The angle of descent has been steep, reinforcing the power of the downtrend in each case.

Psychology, the “gasp” factor has abated, as it has now become widely accepted and a foregone conclusion of how bearish the price action is in each of these firms. The reasons are fairly simple: RIMM is getting its lunch eaten in the smartphone market, and Genco and the rest of the shippers have been as weak as any other area of the market since 2008 with the tepid economic recovery.

Now that both stocks have frustrated enough bottom-callers to the point where they are not talked about much at all, the question you should probably be asking yourself is whether these firms are going out of business anytime soon. The market might know something that we don’t, but I think both firms will be around for a while. If that is the case, then a relevant question is how much bad news, of what is currently known and knowable, has been baked in the cake. Genco has gone from roughly $29 to $4 over the past twenty months, and RIMM from $88 to $21 in basically the same time period. Both of those haircuts are quite steep, even for laggards.

In other words, GNK and RIMM are so bad that they are probably good here.

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AMC Networks (recently spun off stock) is home to some great television, including my favorite show Breaking Bad. ARCO is the McD’s of Latin America. Both charts are flagging out nicely here, and I like them on further strength out of these consolidations.

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On the Twitter stream, @OptionRadar pointed out to me that there has been hot bullish activity in the Avon Products (AVP) January 2010 $22.50 calls. Looking at the carnage in the name in recent weeks, the stock is essentially back to its October of 2008 crash lows (though above the ultimately lows in March 2009). Understand that you are talking about a high quality, well-run firm with a strong dividend and international growth. I believe the stock is vastly overdone here, and if you are not inclined to take on loads of risk with beaten-down, high beta, trashy names, Avon looks to be a better alternative.

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Those drama queen LED plays in the semiconductor sector have been an unmitigated disaster in recent quarters, with CREE lagging both the broad market and the semis as a whole (with the semis lagging the broad market). With CREE‘s huge earnings upside reaction last week, the downtrodden LEDs all of a sudden are showing glimpses of a turnaround. I am watching the following resistance trendlines for upside breaches this week. Should the market continue to improve, I like these names especially considering they are filled with shorts ripe to be squeezed hard.

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I’ll give you an idea for action. The McClatchy Company is one of these “left for dead” newspaper businesses (they own the Miami Herald, e.g.). Roughly half of the float is short, and the chart recently printed a hammer after prior steep downtrend. Today, we are seeing modest upside confirmation in the form of an inverted hammer. If you are looking for a high beta squeeze play, I like this idea with a stop below $1.50.

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