After discussing the markets and individual stocks with Fred and Rob at Lange Financial Services yesterday, we wanted to bring to you some of their thoughts below in this post today. They were looking for a pullback of 3 to 5 % tops and it appears they hit it right on. Wednesday and again yesterday, they were explaining to us how the third day down is usually the time to start buying again, and their reasonings why, which prompted the blog post Wednesday afternoon to buy on weakness.
Lange Financial Services comments:
The 3 to 5 % correction what was recently anticipated became a reality this week. The DOW declined approximately 3% while the NASDAQ and other indices declined up to 5%. Many individual stocks declined up to and more than 10%. This pullback was a reflection of the middle east uncertainties triggering substantial de-leveraging of Hedge Funds and professional investors. Quality stocks we follow declined to levels that were very attractive as a result of the aggressive selling by these funds.
Our thoughts have remained that investors and traders should buy quality stocks into weakness, This has been our theme since August 2010. It has been our experience that on market declines, its usually the third day down that becomes the bottom of that move, and thats a good time to begin to add to or initiate positions.
Below is a list of stocks we believe are attractive and should be accumulated during periods of weakness.
Alpha Natural (ANR)
American Express (AXP)
Devon Energy (DVN)
Cliffs Natural (CLF)
Net App (NTAP)
Federal Express (FDX)
Walters Energy (WLT)
Peabody Energy (BTU)
F5 Networks (FFIV)
McDonalds Â ( MCD )