February 2025

A Look Back At January Stocks:

Last month, we released our list of the Top 20 stocks that had strong historical track records during the month of January. Here are how they performed in January 2025, in order of best to worst performer:

• TEAM: +26.05%
• META: +17.71%
• DXCM: +11.65%
• CIVI: +10.66%
• HCA: +9.92%
• NFLX: +9.59%
• WDC: +9.22%
• VLO: +8.49%
• MU: +8.41%
• DPZ: +6.99%
• PHM: +4.48%
• WYNN: +0.80%
• NXPI: +0.34%
• FANG: +0.32%
• TSLA: +0.19%
• HOLX: +0.07%
• ILMN: -0.67%
• WBD: -1.23%
• NOW: -3.94%
• CELH: -5.16%

The percentages represent the returns from the December 31st close to the January 31st close. The average performance of all 20 stocks (+5.69%) significantly outperformed both the S&P 500 (+2.69%) and the NASDAQ 100 (+2.16%). Our biggest January winner was Atlassian Corp (TEAM), a software stock ($DJUSSW), which soared during January on extremely heavy volume and then added more after its quarterly earnings were released on Thursday, January 30th. The internet group ($DJUSNS) also helped our January performance as both META and NFLX reacted bullishly to their respective quarterly earnings reports.

16 of our 20 stocks were UP in January, with our worst performer being Celsius Holdings, Inc. (CELH), which lost 5.16%. Overall, it was a very strong January for our Seasonality Top 20 picks.

S&P 500 February Performance

The annualized performance of the S&P 500 (since 1950) during the month of February has been relatively flat historically. Since 1950, February outperforms only one other calendar month (September) on the S&P 500. Here's a breakdown of strong and weak performance periods throughout February on the S&P 500:

• February 1-3: +43.17%
• February 4-11: -11.80%
• February 12-15: +39.20%
• February 16-29: -15.45%

February's annualized return since 1950 is +0.04%, which ranks as the S&P 500's 11th best calendar month. The NASDAQ shows a bit more strength as it has an annualized return of 6.85% since 1971, which ranks 10th out of 12 calendar months.

Sector Performance

Last month, I discussed the communication services sector's (XLC) seasonal strength in January, highlighting "we typically see a very strong communications services sector (XLC), which has averaged gaining 3.7% during the month since 2013, the year the current secular bull market was confirmed. The XLC has performed way better than the S&P 500, which has gained an average of 0.8% during January since 2013. Technically, the XLC struggled in December as it fought a negative divergence, which ultimately resulted in a 50-day SMA test and is closing in on a PPO centerline test after earlier printing a negative divergence. It now appears that the PPO has been reset near the centerline, so it wouldn't be a big surprise to see the XLC start to outperform in January 2025." I further pointed out the following on internet stocks ($DJUSNS) in January:

"Internet has outperformed the S&P 500 during EVERY January since 2013, except one. That was in January 2022 as that year's cyclical bear market began that month. The relative performance of internet stocks in January has been truly remarkable, so keep an eye on stocks like NFLX, META, and GOOGL as the month gets underway."

Here's what the XLC chart looked like at the time:

We saw that negative divergence result in a PPO centerline test and a 50-day SMA test to unwind the negative divergence. The XLC performed very well in January 2025, as we suggested, finishing the month higher by 5.75%, trailing only health care (XLV, +6.76%) and financials (XLF, +6.50%). Internet ($DJUSNS, +12.02%) soared, led by both META and NFLX to the upside, aiding our Top 20 Seasonality stocks for January. Check out the January surge on the XLC after we gave it plenty of love heading into 2025:

The good news is that the daily PPO nows looks extremely bullish as price breaks out to all-time highs. There's a negative divergence issue on the weekly chart, however, that will need to be addressed at some point.

February is not a great month, but we do typically see seasonal strength in industrials (XLI), which has outperformed the benchmark S&P 500 by an average of 1.5 percentage points during February since 2012. The XLI has also outperformed the S&P 500 in February during 9 of the last 12 years, or 75% of the time.

Industry Performance

Nearly every industry group within industrials has outperformed the S&P 500 since 2012. Marine transportation ($DJUSMT) has been the strongest group, but I find this group to be extremely volatile. I'd instead look towards two other industries, defense ($DJUSDN) and aerospace ($DJUSAS), which have outperformed the S&P 500 by and average of 2.8% and 2.5%, respectively.

One of these groups clearly looks much better technically right now - aerospace. Check out both charts:

$DJUSAS

$DJUSDN

Both industries were showing excellent uptrends and relative strength until Q4 2024. Since that time, however, the DJUSAS consolidated in a bullish wedge and broke out to the upside, while the DJUSDN just simply broke down.

Here are all industry groups that tend to perform much better than the benchmark S&P 500 during February:

Technology (XLK):

• semiconductors, telecommunication equipment, renewable energy, electrical components

Consumer Discretionary (XLY):

• travel & tourism, hotels, gambling, specialty retailers, auto parts

Communication Services (XLC):

• media agencies

Industrials (XLI):

• marine transportation, airlines, heavy construction, trucking, commercial vehicles & trucks, industrial suppliers, railroads, industrial machinery, building materials & fixtures

Financials (XLF):

• insurance brokers, consumer finance, property & casualty insurance, specialty finance

Health care (XLV):

• none

Consumer staples (XLP):

• tobacco

Real estate (XLRE):

• real estate services

Utilities (XLU):

• none

Energy (XLE):

• coal

Materials (XLB):

• nonferrous metals, steel, aluminum, paper

Stocks for February

We've selected our Top 20 seasonal stocks for February. Several names represent sectors and industry groups that have been discussed above. Others simply stand out in February based on their own historical track record. Here are our Top 20 Seasonality stocks for February:

• TTD
• ENPH
• BKNG
• FTNT
• MOS
• CF
• ANET
• TPL
• NVDA
• SWKS
• NXPI
• CPAY
• AMAT
• PANW
• ZBRA
• URI
• CDW
• BLDR
• AVGO
• CDNS

A "Seasonality - February 2025" ChartList (annotated with 1 or 2 support levels to watch) has been created and will be available for viewing/download on Monday. You must be a StockCharts.com Extra or Pro member to download our ChartLists. Basic members and non-StockCharts.com members can view the charts one at a time.

Happy trading!

Tom