Large drops are great opportunities

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These big drops in the stock market can be deadly for your portfolio. But, as the saying goes, "a phoenix will emerge from the ashes". The secret is to buy stocks that have been burned, but that still have the potential to skyrocket. This article will help you find more of these stocks.

There is a somewhat new phenomenon called "V" shaped recovery. It is essentially a quick lowering, followed by an equally rapid decline. People who watch every tick of almost every stock will have an advantage over most investors; they know the best time to go back.

This leaves most investors in the cold, unless they have the intestinal fortitude to withstand big drops. But who among us has not even panicked a little during the recent lows?

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Markets come back, some stocks do not"data-reactid =" 25 ">
Markets come back, some stocks do not

It seems that almost all stocks suffer some difficulties during a massive sale. Most will pick up lost ground and return to pre-correction levels. Glamor shares, which enjoy broad media coverage, are among the first to offset these losses.

The problem is that the speed with which glamorous actions gain ground can be disconcerting. Actions that do not recover all at once should be the ones you focus on. Another problem is that there are too many stocks and some of them will never get media attention.

Fortunately, there are actions that get beaten, pause almost, and then start going up. These stocks usually have something in common; it's a combination of upgrades and revisions to higher profit estimates.

Continued . . .

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<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Cheap Stocks to buy Monday "data-reactid =" 31 ">Cheap Stocks to buy Monday

<p class = "web-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Zacks now reveals his most promising actions to less than 10 $ The market declines have given these high quality companies an added value greater than 2 times or more. + 129.6%, + 129.9%, even + 193.8%.1"data-reactid =" 32 "> Today, Zacks reveals its most promising stocks below US $ 10 per share (although perhaps not for long), and market declines have allowed these high-quality companies to make gains of up to 2X and more .Close previous recommendations returns as high as + 129.6%, + 129.9%, even + 193.8%.1

The latest stock (including a new pick to be released Monday morning at 10:05) offers the best of both worlds: immediate growth potential AND high probability of long-term profitability.

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Measure fear"data-reactid =" 37 ">
Measure fear

Market-wide sales are often based on macroeconomic events. Sometimes this happens when a country does not pay its bills (Greece), other times it could come from a currency devaluation (China). These macroeconomic events tend to result in sudden and severe price changes in all markets.

There is however a signal that tells us when traders are expecting a big change in the direction of the markets. This is not an infallible signal, but it has given the traders a few heads in the past. The indicator I am referring to is the VIX, a measure of market volatility.

Without going into too much detail, suffice it to say that, as the number of VIXs increases, so does the level of fear on the market. Professional traders who have dry powder often keep their noses and plunge into the mess of markets when the VIX reaches highs. When the index starts to return to more acceptable levels, regular investors tend to do the same.

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Analysts call the bottom"data-reactid =" 41 ">
Analysts call the bottom

While traders and daily market observers have to follow the VIX, those who focus on a day job most of the time find themselves with a different barometer. Analyst reports from brokerage firms and specialized research companies are one of the most important sources of information on the market (which do not come directly from the company) .

Most analysts will simply overcome the volatility in their respective holes and keep their heads down. However, there are some who will lose sight of when they think the time is right. I'm not talking about the analyst who is upgrading the glamorous stock, it's the stock that few people have heard of and that has moved to a figure.

These major fixes offer analysts the opportunity to really get off guard and start hedging or upgrading one of those unloved titles that has seen its price drop dramatically. These events do not happen so often, but soon after things start to look, the upgrades will boost those two-digit actions.

The story continues

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The best part of the upgrade"data-reactid =" 49 ">
The best part of the upgrade

When analysts upgrade a title, they tend to say that the story has changed and that the prospects are improving. Following a major macroeconomic correction, some stocks have exceeded the two-digit threshold, which may make some analysts salivate.

Most people are not surprised when I say that some upgrades are better than others. The total reversal from the sale to the purchase is great, but the heavier upgrade is one that accompanies a strong move to increase profit estimates.

The analyst says not only that the price of the stock is undervalued (thanks to the macroeconomic correction), but the outlook has improved significantly and earnings estimates are accordingly revised upwards . Other analysts see that the upgrade and after some homework could come to the same conclusion. The best result is a series of upgrades with a no less important series of revisions to higher profit estimates.

Although many market sources report on daily improvements and downgrades, few people follow estimates revisions as closely as Zacks' ranking. Use rank in conjunction with massive sales to find stocks that analysts appreciate and anticipate improved earnings.

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Raise rebounds"data-reactid =" 54 ">
Raise rebounds

One of the most profitable ways to profit from rising stocks in a rising market is to focus on some low-priced stocks.

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<p class = "web-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "We select a diverse group of companies on the There are many bullish movements and successes when Zacks Rank and other proven indicators are predicting success, and we follow them up and down, for example, we have recently closed positions with as big gains as possible. + 118.9%, + 129.6%, even + 193.8%.1"data-reactid =" 57 "> We are selecting a diverse group of companies that are on the verge of big gains and we are entering the rankings when Zacks and other proven indicators are predicting success. Then, for example, we recently closed positions with gains as high as + 118.9%, + 129.6%, even + 193.8%.1

<p class = "canvas-atom-canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "This is a particularly good time for research Shares under $ 10. Monday at 10:05 EST, we add a new choice to the portfolio. After a prolonged weakness, the flea industry is heating up again. And out of 36 chip stocks, this is the one on which to invest our money – a small company with huge potential that will gain in power when the deal with China passes. "Data-reactid =" 58 "> This is a particularly good time to consider Shares under $ 10. Monday at 10:05 EST, we add a new choice to the portfolio. After a prolonged weakness, the flea industry is heating up again. And on 36 chip stocks, that's the one we're going to invest our money on – a small business with huge growth potential that will gain an extra boost when the deal with China passes.

You may be among the first investors to subscribe to this recommendation.

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Better,

Brian

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Brian Bolan is our aggressive growth expert and the editor of Zacks & # 39; Stocks Under $ 10 portfolio."data-reactid =" 65 ">Brian Bolan is our aggressive growth expert and the editor of Zacks & # 39; Stocks Under $ 10 portfolio.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "¹ Results for the companies listed above are not (or may not be) representative of the performance of all selections made by Zacks Investment Research newsletters."data-reactid =" 66 "> ¹ The results for the companies listed above are not (or can not be) representative of the performance of all selections made by Zacks Investment Research newsletters.

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Do you want to know the latest Zacks Investment Research recommendations? Today, you can download 7 best actions for the next 30 days. Click to get this free report
& nbsp;
To read this article on Zacks.com, click here.
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Zacks Investment Research"data-reactid =" 67 ">
Do you want to know the latest Zacks Investment Research recommendations? Today, you can download 7 best actions for the next 30 days. Click to get this free report

To read this article on Zacks.com, click here.

Zacks Investment Research