In this morning's newsletter I cover a trade setup on a stock with an exceptionally strong seasonal pattern. Over the next 4 weeks, this stock has gained an average 4.3%, with gains in 21 out of 24 years (88%). That's a pretty good track record.
An average 4.3% gain doesn't sound like much, but the seasonal is so strong that if the stock duplicated the average again this year, 4.3% over 28 days would be the equivalent of a 56% annualized return. And if the underlying sector continues to show strength, this stock could rebound far more than the 4.3% average.
Of course, even though I am targeting being in this trade for only 4 weeks, if it is showing signs of continued institutional accumulation at the target exit date, I will hold onto the position for further gains, selling it only when the picture changes (or the trailing-stop is hit). This stock also happens to pay a good dividend and could be a good addition to a dividend-reinvestment portfolio.
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
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Gregg Harris is the Chief Technical Strategist at MarketTamer.com.
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