While our focus at EarningsBeats.com will always be technicals and fundamentals, we certainly do not ignore seasonal tendencies. Some are very strange - like the fact that home construction stocks ($DJUSHB) perform much better in the 3-month period from November through January than in any other 3-month period of the year. Common sense might suggest that these stocks would do well in Spring. But over the last two decades, this group has averaged returning 9.5% every November through December, while gaining just an average of 0.6% from April through June. That just doesn't seem right, does it? Well, another very odd seasonal tendency is for Netflix (NFLX) to open the new year on an absolute roll:
Enter Netflix (NFLX):
After finishing the year fairly strong in December, NFLX has a history of FLYING higher to open the year. It's averaged rising 15.9% in January since its initial public offering (IPO) in 2002. NFLX was included in our Model Portfolio this quarter (which runs from November 19th through February 19th), so I checked to see how it's performed from January 1 through February 19 to get a little seasonal perspective on what we might see. NFLX has posted an average return of 20% during this 50-day period over 20 years. That's quite the seasonal tailwind to help the stock as we approach 2023.
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Happy Trading!Tom BowleyChief Market StrategistEarningsBeats.comBetter Timing. Better Trades. |