Market to snap back this week? What to buy

Traders work on the floor of the New York Stock Exchange.
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Traders work on the floor of the New York Stock Exchange.

With the S&P 500 down more than 2 percent from its record price, a continuation of the bull market could resume because stocks appear to be oversold.

Based on statistical analysis, certain companies may lead the comeback.

"Investors have been taught with QE [quantitative easing] that you buy a short-term oversold condition," said John Kosar, director of research at Asbury Research. "When you fall into support, you buy the market."

Since reaching an all-time high of 2,135 on May 20, the S&P is near a key minor support level of 2072, according to technical analysts like Kosar.

As depicted on the chart below, Kosar explains that "the S&P is at a monthly oversold extreme that has previously coincided with every near term bottom in the US broad market index this year."

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