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While most people are cursing the market right now, I don’t think that a correction is all negative. It gives you the opportunity to find stocks that have resilience and strength as opposed to those that drift along with market averages for the ride. When the market falters and drops, look for those stocks that buck the trend, consolidate with strength, and build pressure for when the next rally begins.

One method to separate potential gold from the black sand is to find stocks with upgraded forecasts despite the current tepid climate.

DELL (NASDAQ:DELL) - This stock received some favorable upgrades earlier this year, and I recommended buying on both Feb 22nd and March 6th. Prices are up about 6% since then, but compare this to the S&P 500 which dropped 4% in that same amount of time. Sales growth for the year is up over 16% and EPS growth is over 86% (not YOY). I still like Dell and think it’s a good pick in choppy markets.

Foot Locker (NYSE:FL) has also received some decent EPS upgrades for this quarter, year and next year over the past 30 days. They have improved net profit margins over the past few years, which has created huge earnings growth. Their overall growth for sales is a bit blah. Over the past couple of weeks, prices dropped over 11% as the market toppled, and analysts were giving FL a hold rating. I still like it and prices slightly above $22 support make it an okay pick.

Frontier Oil Corporation (NYSE:FTO) and Holly Corporation (HOC) are both oil and gas operations that each have a market cap just above 3 billion. Their price performance is extremely similar. Over the past 7 days and 30 day they have received numerous earnings upgrades. As they sit just 5-6% below their 52 week highs (which has been linked to non-momentum excess gain), I like the way they sit fundamentally and technically. I think they are good buys right now and with a few up-days if they can break new ground….zoom.

Krispy Kreme (NYSE:KKD) – So is eating Krispy Kreme Doughnuts good for your health? While that might be debatable, putting some of their stock in your short-term holdings might do you some good. Do you think that a stock which has basically tripled in little more than a year is too high to buy? With a forward PE of less than 21 and high earnings growth estimates at 50% for the next few years, nice earnings surprises, and recent upgrades, don’t throw that glazed offering away quite yet. Yes, the analysts might have an overly optimistic growth attached to this but with a PEG of only 0.53 I think some have already factored that in.

Signet Jewelers Limited (NYSE:SIG) – Now I know some of you nay-sayers get squeamish when stocks are strongly trending up. For those of you that like support-bouncers and intrinsic value I bring you Signet Jewelers Limited. One year sales growth is only 5%, but if you look at quarterly year over year it sits at 10%. Quarterly earnings growth is up just under 50%. The next 5 years are expected to have over 14% annual growth, and the PE is only marginally above that giving this decent value based on growth. Price to sales is hovering right around 1 which I like. Upgraded earnings and with prices pretty much sitting at support of $41.50 – this is a good support buy…if you like that sort of thing.

Macy's (NYSE:M) – Macy’s is sitting pretty and could be a good buy any day now. Positive earnings surprises quarter after quarter and upgraded earnings are two good aspects of buying this stock. I think you’ll see a nice pop once the 5 year estimates are revised upwards. This year has earnings growth expectations of 20.6%, next year at 17.92%, and a 5 year average of only 4.35%? I don’t think so, not with this year and next year's growth, incoming upgrades, and a recent record of big surprises. A sub-10 forward PE makes this attractive. The price-to-sales is low, only at 0.46, which is nice when sales growth is picking up steam. Both quarter over quarter and year over year the revenue growth is between 5.5 – 6.5%. Add to that improved margins over the last few years… I think 4.35% is an extremely low-ball estimate or 5 year earnings growth - sales growth maybe. I’d double that number for beginners. As prices are about to bounce of $26, this could make a great entry point.

Wrap-up of Upgrades

This isn’t everyone’s cup of tea. Buying upgraded stocks means you have to keep an eye on changing fundamentals. Perhaps they have a terrible quarter, estimates are sharply revised downward, or prices break through support – you need to be quick to act. Always do your own due diligence to make sure you are comfortable with the risk. Go to cash or head to the defensive if buying upward earnings revisions doesn’t have enough firm ground for you to stand on.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: 7 Solid Stocks to Buy During These Choppy Markets