This time of year fewer stocks than normal have strong seasonal patterns, meaning track records of decent gains over the next three to twelve weeks. In other words, the markets typically quiet down post-Q2 earnings.
However, a significant number of quality stocks have records of strong gains going into the fall and winter. So this actually can be a good time to focus on longer-term trades, or picking up good additions to an IRA or other longer-term investment account.
For instance, last week, in the 5/4/2015 Seasonal Forecaster newsletter, I pointed out that General Dynamics' stock (GD) responded well to their earnings announcement on April 29th:
I covered the longer-term seasonal pattern, saying “The seasonal pattern is weak over the several weeks, like most stocks, but over the next 6 months GD has racked up a good track record. GD has averaged a 16.9% gain over the next 25 weeks with gains in 18 out of 23 years.”
So I offered a setup for a longer-term trade in GD, with specific entry conditions and suggested stop-loss/trailing-stops. I also covered an alternative trade using a long call.
What I didn't cover in the newsletter, but was part of my initial decision to offer this trade setup, was evidence institutions had been picking up the stock. On Friday buyers came in again, causing the second large gap-up in two weeks.
The company has a strong order backlog and the stock may be starting a solid move up. There may be good gains ahead going into the second half of the year.
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
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.
The content on any of Market Tamer websites, products, or communication is for educational purposes only. Nothing in its products, services, or communications shall be construed as a solicitation and/or recommendation to buy or sell a security. Trading stocks, options, and other securities involve risk. The risk of loss in trading securities can be substantial. The risk involved with trading stocks, options and other securities are not suitable for all investors. Prior to buying or selling an option, an investor must evaluate his/her own personal financial situation and consider all relevant risk factors. See: Characteristics and Risks of Standardized Options (http://www.optionsclearing.com/publications/risks/riskstoc.pdf). The www.MarketTamer.com educational training program and software services are provided to improve financial understanding.
Also on Market Tamer…
Follow Us on Facebook