Insiders are buying, writes Mark Hulbert of Hulbert Financial Digest in his MarketWatch column. So maybe now is the time to take the contrarian approach.

After selling at an unusually fast pace, corporate insiders, corporate officers, directors and the largest shareholders, are now bullish on stocks, writes Hulbert, who tracks advice of financial newsletters.

For evidence, Hulbert points to the insider indicator from Vickers Weekly Insider Report published by Argus Research. The indicator, the ratio of the number of shares that insiders have sold to the number they've purchased, was a bullish 1.68 to 1 for last week. By comparison, the indicator's long-term average is between 2 and 2.5 to 1, and it was a remarkable 6.43 to 1 for the week ending July 22.

As the market got worse last week, corporate insiders bought more. For example, on Friday, the day after the Dow fell 513 points, the ratio was 0.33 to 1, indicating an unusually bullish outlook.

History shows that those insiders are usually, but not always, right, he notes. And when they are right, stock markets sometimes take some time to meet their predictions.

"Still, it is comforting that a group of investors who presumably know more about their companies’ prospects that the rest of us consider the low prices of their stocks to represent attractive bargains," Hulbert writes.

He's not the only one recommending a contrarian approach.

Morningstar analysts think that now is good time to purchase high-quality stocks for cheap prices, writes Esther Pak, assistant site editor of Morningstar.com.

Pack recommends working with a good mutual fund manager employing a contrarian strategy. Make sure you have a long time horizon and the discipline to keep the fund if its value declines, she adds. Investors picking stocks themselves must be careful to diversify research companies extensively, and be careful to avoid a value trap.