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Posted on 9 August 2011 | 6,799 views

Blue Chip Stocks to buy After the August 2011 Stock Market Crash

Heading into the week of August 8, 2011 — there will be no surprise to see a notable sell-off, but one that would create the conditions to jump back in and buy large-capitalization stocks that have been sold down too far.

These deeply oversold markets create an authentic “Blue Chip Rally” where they have only occurred six times over the past five years and are historically great entry points back into equities.

At this important inflection point in the market, panic selling pressure erodes and renewed demand for stocks floods the market elevating stock prices.

Historically, an authentic “Blue Chip Rally” opportunity has been a very reliable indicator of significant market bottoms followed by a surge in stock prices.

In the last 20 years, market sentiment has an authentic “Blue Chip Rally” level five times. Historically, each of these instances has proven to be exceptional times to invest in equities.

The last five events that sparked an authentic “Blue Chip Rally” have been:

  • October 22, 1987 — Portfolio insurance selling triggered the historic stock market crash
  • August 30, 1990 — Oil prices spiked ahead of the first Iraq War
  • September 3, 1998 — Russia defaulted on its debt and the bailout of Long Term Capital Management
  • September 11, 2001 — The stock market plummeted after the attack on the World Trade Center
  • July 25, 2002 — The Dot Com Bubble Burst and ended “Irrational Exuberance”

Each of these “Blue Chip Rally” opportunities was followed by very strong rallies in the stock market.

The market’s sharp sell-off has some of the world’s biggest and best-known companies trading at bargain basement prices. Does that mean you should buy?

Here is the latest “Dogs of the Dow” list that should provide the best advantage for traders when the stock markets make a bottom.

AT&T (Stock Symbol: T)
Verizon (Stock Symbol: VZ)
Merck (Stock Symbol: MRK)
Pfizer (Stock Symbol: PFE)
Johnson & Johnson (Stock Symbol: JNJ)
General Electric (Stock Symbol: GE)
DuPont (Stock Symbol: DD)
Procter & Gamble (Stock Symbol: PG)
Intel (Stock Symbol: INTC)
Kraft (Stock Symbol: KFT)

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