"I think the recent selling spree will act much like a thunderstorm clearing the air. From now on, you should focus on picking up the good values dropped by the panicky sellers," says leading growth stock specialist Richard Band, who recommends a package of three technology issues: Cisco Systems (CSCO), Google (GOOG) and Research in Motion (RIMM).
The editor of Profitable Investing, explains, "It will probably take several weeks of whippy, back-and-forth trading before the market fully regains its equilibrium. However, most of the damage has been done.
"This is how turnarounds begin. Stocks got smashed as ongoing troubles in Europe and a threat of war in the Korean peninsula weighed on investors' minds. Next, bargain hunters stepped forward.
"It's too soon, of course, to know whether we've seen the bottom of this ugly "correction." But I noticed one encouraging clue. Despite the decline in the Dow and other headline indexes below their May 6 intraday lows, fewer stocks are showing serious breakdowns (to new 52-week lows)."A shrinking list of new lows is one of the simplest -- and strongest -- technical hints that a bottom is near. Hang in there, and don't give up the ship!
"If you're of a more aggressive mind, you might lay in some beaten-down technology stocks like Cisco at $25.60 or less; Google, at $540 or less; and Research in Motion, at $71 or less.
"All three are cruising for record earnings in calendar year 2010, and the recent pullback has compressed valuations dramatically. I think a package of the three (equal dollar amounts) will reward you with a 30% to 40% return in the next 12 months.
"In particular, Research in Motion is quoted at a mere 12X estimated net for the year ahead, and earnings projections for the company are steadily ramping up.
"A decade ago, the 'Internuts' would have been falling all over each other to bid 50X, 80X or even 100X for this Blackberry maker. Today, this great business is yours for a fraction of what it would have cost back in the days when people thought trees grew to the sky."
Steven Halpern's TheStockAdvisors.com offers a free daily review of the favorite stock ideas of the nation's top financial newsletter advisors.