These days there are so many stocks that have been absolutely decimated from the recent stock crash. Many stocks have declined by 50% or more in past 4 to 5 weeks. Often, when we see declines such as these there will be opportunities in many different stocks and sometimes different sectors. The best stocks to look for will be stocks that declined less than the major stock indexes. So if you look at the Dow Jones Industrial Average (DJIA) you will see that it fell by as much as 34.85% on March 23, 2020. If you can find a stock that did not decline as much as the DJIA it would be worth keeping that stock on the radar since it showed relative strength. Once a bullish pattern forms in that equity it will likely be a buying opportunity in that particular stock.
Another method that I like to use in crash markets is to look for stocks that have recaptured the 50-day moving average. Most institutional investors will look for stocks that are trading above this important moving average and so should you. Again, wait for a bullish pattern to be formed and then you have a trade on your hands. This is a time to pick through the rubble if you are going to find winning stocks. Remember, this COVID-19 crisis is not over just because the market bounces, so it is best to stick with strong stocks in this environment and nothing less.