NEW YORK (CNN/MONEY) - It's well known that deeply depressed stocks often enjoy a rally as the year comes to a close. This used to be called the "January effect," but the phenomenon has occurred as early as November in recent years.

The chief reason that depressed stocks can rebound late in the year is that investors sell such stocks to book losses for tax purposes. That selling pushes already cheap stocks even lower. But once the tax selling ends, the share prices often snap back.

On average, those gains run a little more than 10 percent. But if economic conditions are favorable, they can continue through the first two or three months of the new year and total close to 20 percent.

Such an extended rally looks likely this year. The bitter Presidential campaign has been a depressant for stocks. So have the troubles in Iraq and fears that the economy is flagging. All told, the market is at least 20 percent below average levels for recoveries since 1900.

Since the tax year for individuals typically ends in December, small stocks often don't rally until near year-end. But for mutual funds and some other institutional investors, the cut off for tax selling is Oct. 31 (so they can do all their accounting and distribute gains and income to their shareholders before the end of the tax year).

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As a result, leading blue chips that are favorites of institutional investors may hit bottom and start turning up as early as mid-November. This year, four stocks on the Sivy Seventy list -- Clear Channel Communications, Coca-Cola, Intel and InterActive Corp. -- look like candidates for some kind of comeback.

Of the four, Coca-Cola has the least analyst support. And I've recently been recommending better-performing PepsiCo instead.

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But after falling 22 percent in just the past four months, Coke (Research) looks like a buy on purely statistical grounds for value investors willing to wait for the company to get its act back together.

The Coca-Cola name is still among the world's top brands. Compound annual growth is expected to top 10 percent over the next five years. The shares now pay a 2.4 percent dividend yield, surprisingly high for Coke. At $41.28, the shares trade at less than 20 times estimated earnings for 2005.

Clear Channel Communications (Research), down 30 percent from its high, reported mixed results for the third quarter.

The radio business although still weak did better than expected. But the company's outdoor advertising and other divisions were disappointing.

Overall, annualized earnings growth was less than 9 percent. Analysts think the worst is over, though, and project a 13 percent gain in 2005 that could accelerate slightly over the coming five years.

The shares also pay a 1.4 percent yield. At $33.31, the stock trades at 21 times 2005 earnings.

Intel (Research) is another stalled franchise that looks to have brighter days ahead. The leading maker of microprocessors for personal computers faces flat earnings in 2005. PC sales are projected to scarcely rise and there are currently excess inventories of chips.

Still, this industry leader could enjoy earnings growth as high as 15 percent a year in a better environment. At $23.23, this quality franchise trades at 20 times 2005 earnings.

InterActive Corp. (Research) was a great disappointment this year for investors looking for Internet stocks with real businesses.

The company -- which owns Expedia, the HSN home shopping service, Match.com and Ticketmaster -- has failed to deliver the double-digit growth that investors expect.

But the most recent quarter's results, reported last week, showed a 13 percent revenue gain and substantially larger increases in earnings and cash flow. In addition, the company announced a sizable share-repurchase plan.

Earnings growth is projected at 15 percent in 2005 and an average rate of as much as 20 percent over the next five years. At $25, the stock trades at less than 25 times earnings -- a multiple that would once have seemed dirt-cheap for a dot-com.

Michael Sivy is an editor-at-large for MONEY magazine. Click here to receive Sivy on Stocks via e-mail every Monday.