One of my fundamental and very successful trading strategies has been to examine closely ANY stock that has a 20% or greater single day loss. There are screens available that show the biggest % losers on Nasday and the NYSE. I simply examine the stock, business, balance sheet and other key aspects. If the business is strong and healthy but the drop is just a typical kneejerk over-reaction to a short-term issue - PARTICULARLY due to missing a precious quarterly earnings estimate by a few pennies - I buy the stock.
Buying this way eliminates a HUGE part of the risk since a large part of any downside is already washed out with the big price drop.
I first discovered OCZ last summer since it was on the NASDAQ big loser list after the Copperfield hit piece. I made good money trading the stock last year but after the last conference call I added my last chunk for a long-term hold. NO more trading it for me since I believe there is a monstrous gain to be had over the next year or two and I would like to exit under long-term capital gain treatment.