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Our latest list of the best stocks to buy comes out as the Dow Jones Industrial Average turns positive for the year.
The Dow is up nearly 1,500 points (1% year to date) after an 8.7% drop from Jan. 1 to mid-February.
But there's evidence this rally will end soon and the Dow will turn negative again. And you'll have the opportunity to grab our top stock picks at a steep discount.
A rare technical indicator called the "bearish cross" just signaled on Feb. 29. The indicator suggests stocks will pull back sharply in the coming months.
The bearish cross appears when the 10-month S&P 500 moving average crosses below the 21-month MA. That happened on Feb. 29, when the S&P 500 closed at 1,932 – and signaled the third bearish cross in the last 22 years.
To give you an idea of what this means: When this indicator signaled in May 2008, the S&P 500 dropped from 1,400 to 680 by March 2009 – a 50% drop that coincided with the Great Recession.
Savvy investors then picked up their favorite stocks when the S&P 500 bottomed out. Many made a fortune.
Now you have the opportunity to do the same after the next market downturn.
Our latest list of the best stocks to buy is ideal for this scenario. Many of these stocks have great long-term growth potential – built for market comebacks.
Money Morning Chief Investment Strategist Keith Fitz-Gerald likes an entertainment company with some of the most iconic and profitable assets in the world.
Defense & Tech Specialist Michael A. Robinson recommends a tech company that's a leader in a newly emerging auto market, which could serve more than 50 million drivers by 2020.
We also included one of the best plays on oil and a gun stock. These stocks are standouts in their respective industries.
It's all here – and more – in our latest list of the best stocks to buy now…
Money Morning's Best Stocks to Buy Now
- Money Morning Chief Investment Strategist Keith Fitz-Gerald likes a stock that has made investors tons of money during market reversals. The last time the bearish cross signaled, this stock dropped to a 45% discount to $30 a share before reversing and shooting up 425% through August 2015. That landed it at $122.08 a share. Fitz-Gerald's stock pick has some of the most popular assets in the world and is expanding its franchises even more in 2016. Find out more about this top stock's bright future here.
- About 155 million cars in North America are hooked up to what's called an on-board diagnostic (OBD) device. These devices are used to measure your speed, how often you brake… even what time you drive. Strangely enough – many of these devices are used by insurance companies for what's called usage-based insurance (UBI). By 2020, there's going to be 50 million U.S. drivers using UBI, up from about a million today. This makes OBD a smart tech investment before its sales take off. Money Morning Defense & Tech Specialist Michael A. Robinson likes one of the leading developers of OBD technology. He sees this company's small-cap stock reaping the most reward from this newly emerging market. Find out more about this small-cap stock's growth potential here.
- Even as oil prices are trading slightly above $40 a barrel this week, there aren't many investors that will go near oil stocks right now. But not all oil stocks should be shunned. We like an oil company that has consistently beat earnings estimates for the last six quarters. It made $99 billion in revenue last year despite the 36% crash in oil prices. That's because this company is in the refining sector, which thrives when oil prices are low. This company's insulation from oil price volatility makes it a good buy even when the energy sector is struggling. Find out more about this resilient oil stock here.
- Gun stocks have been thriving this year. That's because – once again – gun control has become a pressing issue in Washington. The shooting in San Bernardino thrust guns back into the center of the news cycle and Congressional meetings. As they've done historically, gun stocks proceeded to rise sharply. In fact, the three biggest gun stocks are beating the S&P 500 by an average of nearly 25%. But there's one gun stock that's doing even better than the rest because of its widespread customer base. This gun company just reported a 56.4% increase in its firearm sales year over year. It also just raised its revenue projections for 2016. Find out more about this gun stock's incredible return potential here.
- It's not easy to find a penny stock that isn't a gamble, which is why the one we've just picked is a standout. This penny stock is capable of 100% gains or more with its new clean energy technology. This "green" energy company even has the potential to save a dying U.S. industry. With its new technology, it's already landed big projects with companies like Pfizer, and has many more projects in the pipeline. Find out more about this promising penny stock here.
- The car industry is evolving quickly. New technological developments like ride-sharing, driverless vehicles, and "connected" cars are testing the minds of the world's top automakers. Money Morning Executive Editor Bill Patalon likes one carmaker that's going to make a huge profit from these nascent areas. In fact, this carmaker just created an entire subsidiary to research and implement cutting-edge, "smart car" technology. This new venture is sure to benefit this automaker's stock. Find out more about this auspicious car stock here…