Secure Stocks for an Unsure Market
High unemployment, a shaky economy with talk of a “double-dip recession,” and more debt crises in Europe drove stocks lower throughout most of August. And fear of lower prices has kept the public out of stocks following the breakdown of the major indices early in the month. Technically a Dow Theory Bear Market signal resulted from a mid-month breakdown, and other technical characteristics followed including a “death cross” and a plunge in the S&P 500 to 1,101 and last summer’s trading range.
Late in the month, the indices formed symmetrical triangles, which are continuation patterns that indicate indecision — in this case a three-week period of indecision due to the withdrawal of the public from a market that is in the hands of “high-frequency trading.” Normally a pattern like this breaks in the direction of the major trend (down). But due to the currently unnatural source of trading (computer to computer), it could break on the upside and run the broad market back to the breakdown point at S&P 500 1,260. But lower prices in September could provide opportunities to buy quality stocks at bargain prices, and this month’s list of stocks to buy has been examined for those opportunistic bargains.
Here are the top stocks to buy for September: