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Chart of the Day / Chart of Day: Seasonal Trades to Consider for Holidays

Chart of Day: Seasonal Trades to Consider for Holidays

November 21, 2018

Most of us are well aware of the seasonal trading patterns around the holidays.

Most of us are also well aware that companies whose sales and profits ramp up in the holiday season are great stocks to buy for a short-term run-up.

In fact, we’ve found three hot stocks that have a history of running higher around the holidays.

Seasonal Holiday Stock No. 1 — Weight Watchers (WTW)

Every year, it’s the same old story.

Americans — about 90% of them, according to Johns Hopkins Medicine — make their New Year’s resolution to lose weight, diet, and exercise more.  And as many of us know, that usually ends in passing the resolution on to the following year.

It’s a seasonal phenomenon that many of us are all too familiar with.

Most likely, this year won’t be any different, as we head into the annual raking through of kids’ Halloween candy, the Thanksgiving spread, alcohol-fueled office parties, and all of the December holidays with friends and family.  It’s “the most wonderful time of the year” when we begin to worry about our expanding waistlines, and promise ourselves that next year will be different.

We make plans to exercise and lose weight.  One of the main beneficiaries of that promise to ourselves is Weight Watchers.

After plunging on earnings and subscriber numbers, the stock has become excessively oversold.  And as we’ve seen over the last two to three years, WTW has no problem gaining holiday momentum.

Seasonal Holiday Stock No. 2 – FedEx (FDX)

In most years, shares of FedEx have turned higher in the holiday-shipping season.

All as millions of packages are delivered all over the country for the holidays. This year should be no different.  In fact, Nancy Perez, managing director and senior portfolio manager at Boston Private, a thinks e-commerce should translate into another healthy season for FedEx. She sees revenue growing by double digits as it continues to gain traction from the strong U.S. economy.

Better yet, it’s one of the few companies that benefit from Amazon shipping, rather than suffering from it as other retailers have.

Seasonal Holiday Stock No. 3 – Best Buy (BBY)

Best Buy is another holiday gem with a history of higher highs in the holiday season.

Just last year, the stock ran from $55 to $80 during the holidays.  The year prior it ran from $35 to $45. Now, after a recent pullback with the markets, we expect to see higher highs.

Better yet, Best Buy should benefit from a broad uptick in consumer spending.

A Seasonal Strategy Just Makes Sense

If you see that a particular stock has run up year after year, it’s a great indicator that you may want to buy a stock like Best Buy, or FedEx before a big seasonal move higher.

Other than the holidays, we can trade stocks on the winter patterns, too.

During the winter, for instance, demand for coffee and tea often increases, which can have an effect on stocks like Starbucks (SBUX). We can even look to businesses like Home Depot (HD) that sell snow shovels and heaters. Or, even a tock like VF Corporation, which owns The North Face and its warm coats.