Pundits fall all over themselves trying to pick stocks that will beat the market. However, in the current market environment it seems traditional filters are not working the way we would normally expect. Success today requires thinking outside the box and a different type of strategy — one that does not correlate with the broader market.

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I call it “swinging for the fences” because if I am right, I could hit a home run. However, striking out is a distinct possibility. While that means potentially losing money — and possibly quickly — we can manage that risk with a stop-loss.

Avon Products (NYSE: AVP) looks to have turned a corner from a technical point of view. 

To be sure, the fundamentals still look lousy. The company has a history of earnings misses and slashed its dividend a few years ago. Even after that, the dividend yield still stands at a very rich 5.3%, a result of the bearish price activity.

But the market often sniffs out a turnaround in a stock long before the fundamentals show any improvement. It is in this spirit that I think Avon would be a good speculative bet.

Prior to the 2008 financial crisis, Avon traded above $45. A plunge below $20 was followed by a sharp recovery in 2009. But the pain wasn’t over for AVP, as it has been in a grueling bear market for the past few years. Even after a recent bout of strength, the stock trades at one-tenth of its former value.

Since September, AVP has moved sideways as it licked its wounds. No doubt, a seven-month base is hardly large enough to reverse an eight-year bear market, but it is in the ballpark when we consider the three-year decline since early 2013 when Avon traded near $24.

Indeed, a trendline drawn from October 2013, when prices began to decline in earnest, was broken to the upside last month. And resistance at the top of the basing pattern, which some would label as a double-bottom, has also been pierced. 

AVP is trading above all of its commonly watched moving averages from the short-term 20-day to the long-term 200-day. This suggests the bulls are in charge across all time frames, although it is still too early in their reign to be confirmed. 

Indicators also show marked improvement. On-balance volume, for example, is currently in a four-month rally of its own, marking the first time since 2009 that money has actually flowed into the stock rather than out.

And if we jump back out to the long-term weekly chart, we will see a bullish divergence between momentum and price action. The Relative Strength Index (RSI) actually bottomed a year ago and has set higher highs and higher lows since then. Plus, RSI is above the 50 level for the first time since 2013, which tells us the path of least resistance is finally to the upside. 

There is one more indicator I’d toss in with the caveat that I am not an expert in the subject. Because Avon has been a dog for so long, the bears have been pressing their case. Short interest is above 9% of the current float, which is significant. Last year, it spiked above 20%, so a good deal of short positions have already been covered. But historically short interest was in the 2% area before the company’s troubles exploded. 

The high level of short bets suggests a lot of people do not expect much improvement. Therefore, should the current small breakout hold and the stock start to follow through with further gains, I anticipate a stampede back into AVP — even if only to wash away the bearish excesses that have built up over the years. 

I can see a 38.2% Fibonacci retracement of the stock’s 2013-2016 decline, which would target the $10.75 area. And that would not even reach major overhead resistance from the bottom of the 2008 rout and several other price congestion zones that formed in 2012 and 2014. But since the stock is risky enough, I’d rather err on the more conservative side with my target. 

Recommended Trade Setup:

— Buy AVP at the market price
— Set stop-loss at $4.20
— Set initial price target at $10.75 for a potential 137% gain in six months

Note: If you’re worried about the risk, there is a way to put less money up while potentially amplifying your returns. The strategy was developed by a former Wall Street prodigy who used it to make $600,000 by the time he was 18. He’s agreed to share his secret with a handful of traders. If you’d like to get on the list, click here.

This article originally appeared on Profitable Trading: Under $5 Stock Could Double In The Next 6 Months