18.2% in 3 weeks

In the January 26th issue of Seasonal Forecaster I focused on Crane Co. (CR), saying “Crane manufactures industrial products  in four segments: Aerospace & Electronics, Engineered Materials, Merchandising Systems, and Fluid Handling.

“The stock may be forming a double bottom, and it currently sits right at the 50-day moving average. The volume pattern is showing accumulation is coming into the stock. Institutions may be seeing value in the stock at the current price.

“Crane will announce earnings today, after the markets close. If earnings are good, and the markets responds well to them, this stock could generate nice gains in a short amount of time. CR has a strong track record of gains following the late-January earnings announcements:

After the close, Crane announced earnings that just met expectations on earnings. Revenue was up 7.2% year-over-year. CR dropped in overnight trading, but strong buying immediately came in as the stock opened Tuesday morning. By 11 am, with the stock surpassing the earlier 10:25 am high, I recorded a trade entry in the stock. The DJIA was down 360 points, but money was flowing into Crane.

We are now up 18.5% on this trade after just three weeks. The next target is the June 2014 high of 77.

The identification of the strong seasonal pattern is what brought this stock to my attention to begin with. Many industrial stocks have strong seasonal tendencies, as institutions trade cyclical patterns in sales and earnings. With Crane for instance, its revenue often increases in the February and April reporting periods and pulls back in the October period.

Smart institutional traders who follow the company closely know this and each year will trade the expectation of stronger revenue and earnings in the spring. It doesn't always work out as a gain for the stock, but it happens regularly enough that this time every year a trader should be looking for a good technical setup in the stock for trade entry.

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, please click on the following link: www.markettamer.com/seasonal

By Gregg Harris, MarketTamer Chief Technical Strategist

Copyright (C) 2015 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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