According to some, opportunity is knocking for blue-chip stocks and the exchange traded funds (ETFs) that count them as components.

The S&P is around 14% undervalued right now, according to Morningstar Analyst Jeffry Ptak. Broader indexes and "blue-chippy" stocks are where the excitement may be at, reports Chuck Jaffe for MarketWatch. Ptak feels that investors could feel more comfortable going after broad indexes instead of focusing on thin, volatile bits of the market.

Whatever your feeling, when you make investment decisions, stick to a plan such as using the 200-day moving average. If short-term is more your style, look at the 50-day moving average and sell when it drops below or 8% off its high.

Blue-chip opportunities:

  • Dow Diamonds (DIA)
  • SPDRs (SPY)
  • Rydex Russell Top 50 (XLG)

Read the disclosure, as Tom Lydon is a board member of Rydex Funds.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.