Bucking the Trend: If You Insist on Buying the Dip, Keep an Eye on These Stocks

(List compiled by Eben Esterhuizen, CFAInstitutional data is sourced from Fidelity, all other data from Finviz.)

How significant is the recent market sell-off? Just ask technical analysts, who have pointed out that the percentage of S&P 500 stocks trading below their 50-day moving averages are at levels last seen during the darkest days of the 2008 crisis.

“The reading is actually worse than the low of March 2009 and at lows of fall 2008,” writes TraderMark at FundMyMutualFund.com.

In other words, based on the 50-day moving average indicator, the market is currently more oversold than at any time during the 2008 crisis.

Of course, contrarian investors might see this as a bullish signal, but there are still many unknowns that can hit stock prices: European debt troubles, a political leadership void, dollar volatility and banking sector woes, just to name a few.

The bottom line: The time to take on more risk may be approaching, and stocks are becoming cheaper by the day, but extreme volatility may become the norm over the coming months.

So, we’re wondering, which S&P 500 stocks are bucking the trend, and trading above their 50-day moving averages? And more importantly, which of these companies have seen institutional buying over the last quarter?

Big money managers seem to think these stocks will remain resilient against the market the downturn–do you agree? If you think that the market is extremely oversold, this list might offer a good starting point for a rebound idea.

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1. Motorola Mobility Holdings, Inc. (MMI): Diversified Communication Services Industry. Market cap of $11.17B. The stock is currently trading at 55.35%. Net institutional purchases over the current quarter at 72.6M, which is 27.70% of the company’s 262.14M share float. The stock has had a couple of great days, gaining 54.72% over the last week.

2. CF Industries Holdings, Inc. (CF): Agricultural Chemicals Industry. Market cap of $11.83B. The stock is currently trading at 12.73%. Net institutional purchases over the current quarter at 3.8M, which is 5.32% of the company’s 71.44M share float. The stock has gained 84.% over the last year.

3. Consolidated Edison Inc. (ED): Diversified Utilities Industry. Market cap of $15.92B. The stock is currently trading at 3.54%. Net institutional purchases over the current quarter at 8.6M, which is 2.94% of the company’s 292.32M share float. The stock has gained 21.94% over the last year.

4. NiSource Inc. (NI): Diversified Utilities Industry. Market cap of $5.68B. The stock is currently trading at 0.57%. Net institutional purchases over the current quarter at 4.1M, which is 1.47% of the company’s 278.97M share float. The stock has gained 28.75% over the last year.

5. Southern Company (SO): Electric Utilities Industry. Market cap of $34.28B. The stock is currently trading at 0.85%. Net institutional purchases over the current quarter at 11.5M, which is 1.34% of the company’s 856.60M share float. The stock has gained 17.21% over the last year.

6. Newmont Mining Corp. (NEM): Gold Industry. Market cap of $32.65B. The stock is currently trading at 14.21%. Net institutional purchases over the current quarter at 3.9M, which is 0.80% of the company’s 486.76M share float. Exhibiting strong upside momentum–currently trading 11.07% above its SMA20, 14.21% above its SMA50, and 12.43% above its SMA200. The stock has gained 4.76% over the last year.

Interactive Chart: Press Play to see how analyst ratings have changed for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.


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