Covance Inc (CVD) provides drug development services to pharmaceutical, biotech, and medical device companies. In the May 22nd, 2013 issue of Seasonal Forecaster, I mentioned that “I've been waiting for a pullback to mention it, but pullbacks are few and far between on the good stocks right now. Instead of a pullback in April, it consolidated sideways, letting the 50-day Moving Average come up to it. Recently, CVD broke about the previous resistance to set a new 4-year high, and then it fell back on low volume to test support.“
I focused on CVD's track record for the near future, saying “CVD's seasonal chart shows a nice gain over the next 9 weeks. CVD has averaged a 12% gain, with gains in 13 out of the 16 years. It frequently coughed up some pretty good gains during this time period:“
CVD certainly made sense as a stock-only trade at that time (I also covered long call possibilities).
While the averages of past performance on seasonal charts are only a rough guideline of what can happen in the near future, sometimes it plays out pretty accurately. The seasonal chart of 5/20/13 showed an average 12.0% gain over the following 9 weeks. How did it play out this year? CVD was up 11.4%, 9 weeks later.
Since late February, CVD has stepped upwards in a series of rebounds from the 50-day moving average, breaking above the recent highs each time. At the late October highs, CVD was up 21% from May 22nd. With Thursday's close, it is still up 15%.
CVD is once again rebounding from its 50-day MA:
Does CVD offer potential for further gains? Today's Seasonal Forecaster issue shows the current seasonal chart and what trade strategies, if any, are possible.
Of course, there's much more you need to know and many more stocks you can capitalize upon each and every day. To find out more, type in www.markettamer.com/seasonal-forecaster
Copyright (C) 2013 Stock & Options Training LLC
Unless indicated otherwise, at the time of this writing, the author has no positions in any of the above-mentioned securities.
Gregg Harris is the Chief Technical Strategist at MarketTamer.com with extensive experience in the financial sector.
Gregg started out as an Engineer and brings a rigorous thinking to his financial research. Gregg's passion for finance resulted in the creation of a real-time quote system and his work has been featured nationally in publications, such as the Investment Guide magazine.
As an avid researcher, Gregg concentrates on leveraging what institutional and big money players are doing to move the market and create seasonal trend patterns. Using custom research tools, Gregg identifies stocks that are optimal for stock and options traders to exploit these trends and find the tailwinds that can propel stocks to levels that are hidden to the average trader.
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