The Dow Industrial stocks have been at the epicenter of the strength in this market that started with the 280-point rally last Thursday. That said, the weak action from the market today is not unexpected. The surge higher in the Dow over the last four days was ripe for some correctional selling.

The weak earnings news from


(INTC) - Get Report




, as well as the shuttering of two hedge funds by

Bear Stearns


, acted as a bearish catalyst in this overbought market environment.

The fact that the market has once again pushed to new highs makes any type of correctional selloff look like an opportunity to put some of these large-cap names that have acted so well into the portfolio.

The extended nature of the recent rally in the largest-cap names, as well as the uncertainty surrounding earnings season, should make for a more difficult trading environment in the coming weeks, but the overall look of the major indices remains solidly bullish, and there are still plenty of excellent-looking charts that can be bought right here.

Twenty of the Dow 30 stocks are on the offensive and holding strong bullish charts right now. The rest are in marginally bullish positions, but we would avoid these companies and stick to the strong relative-strength names.

A few that fit the bill and are not extended at the moment are


(MRK) - Get Report



(DD) - Get Report



(HPQ) - Get Report



(MMM) - Get Report


Some other names that qualify are


(MCD) - Get Report



(VZ) - Get Report



(MSFT) - Get Report

. Out of this list of stocks, we would suggest taking a closer look at Hewlett-Packard and DuPont Chemical.

Hewlett-Packard is an interesting stock to look at after Intel's earnings report. Intel reported strong unit sales, which suggests to us that PC shipments are relatively strong. The chart for HPQ is solid. The strong action on Thursday broke the stock out of the consolidation pattern it's been holding since May and reasserted the primary uptrend. HPQ is holding the breakout, and this looks like an excellent entry point into the stock.

A break below the consolidation formation would take HPQ off the offensive and suggest the stock has run into a problem. We would use the $43.50 level as a stop-loss.

DuPont is another name that traders should consider getting long here. The chemical sector continues to show strong relative performance vs. the broader market, and DD looks ready to emerge from the large consolidation formation that has developed since the beginning of the year.

DuPont is emerging from a multiyear base formation; this indicates that the stock is now ready to establish a new long-term uptrend.

The Dow has made an amazing run over the last year, but there are still a number of its components that present an excellent risk/reward scenario for investors through the end of the year.

At the time of publication, John Hughes and Scott Maragioglio had no positions in the stocks mentioned. Hughes and Maragioglio co-founded Epiphany Equity Research, which has developed and utilizes proprietary tools to identify and track liquidity changes in the market indices and sectors. Hughes advises numerous asset managers, hedge funds and institutions managing in excess of $30 billion. Maragioglio is a member of the market technicians association (MTA) as well as The American Association of Professional Technical Analysts (AAPTA) and holds a Chartered Market Technician (CMT) designation. Maragioglio has also served on the board of directors of the AAPTA.