After stocks plummeted at the start of Tuesday’s trading week, CNBC’s Jim Cramer explained three ways investors can find buying opportunities.
“Recall the three types of stocks to buy on bad days: those that bounced back anyway, those that finally got a long-awaited pullback, and those that were recommended but because of the bad The “Mad Money” host said.
“Make your choice [or] do all three, just as long as you view the sell-off as an opportunity, not a cause for panic.
Cramer recommended that investors take a look at tech giants Apple and Amazon, whose stocks rose 1.4% and 4.7% respectively.
He also advised the ownership of an oil company such as Devon Energy. Devon was down about 10% last month and the stock retreated nearly 5% on Tuesday alone.
For the third group of stocks, Cramer recommended finding stocks of companies that failed to rally despite positive news catalysts. American Express stocks should have jumped $ 4 on Tuesday after being upgraded to call to buy by a Goldman Sachs analyst, he said.
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“Think of these stocks as textbook examples to buy on a bad day,” said Cramer.
The S&P 500 had its first negative price in nearly two weeks and the Dow Jones Industrial Average failed to post profits for a fifth straight day. The tech-heavy Nasdaq Composite, on the other hand, rose 0.17% to another record close.
“When people buy stocks, the timing is almost never right. If you buy a stock right at the bottom, I call it a miracle. More often than not, you buy them too early or too late, ”advised Cramer. “So you have to leave room so you don’t panic and sell if the stock goes down. Instead, just take the pain and buy more of a good company at a lower level.”
Disclosure: Cramer’s nonprofit trust owns shares in Apple and Amazon.
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