Despite a modest decline in major indexes, many individual stocks have dropped significantly, with some down 20% to 50% from their highs, creating opportunities for contrarian investors. Jeff Clark of TradeSmith attributes this selloff to a shift in market leadership, moving away from last year’s tech-driven gains towards sectors that were previously overlooked.
Key stock picks from Clark include oversold software stocks like Oracle (NYSE: ORCL) and Microsoft (NASDAQ: MSFT), which could see returns of 25% to 30% if they revert to their 50-day moving averages. Additionally, Clark highlights Bitcoin as a contrarian buying opportunity, currently trading about 25% below its 50-day moving average. Albertsons Companies, Inc. (NYSE: ACI) is positioned as a defensive play in the grocery sector, with potential upside of 20% to 30% as economic uncertainties rise.
Conversely, Clark warns against investing in gold and precious metal miners, as he believes they have reached an intermediate-term peak. The emphasis is on disciplined contrarian strategies in a market characterized by rotation rather than collapse.
