EB Monthly Seasonality Report - June 2024
A Look Back At May Stocks:
One month ago, we provided a list of the Top 20 stocks that had strong historical track records during the month of May. Here are how they performed in May 2024, in order of best to worst performer:
- NVDA: +26.84%
- ENPH: +17.60%
- NFLX: +16.60%
- VRTX: +15.92%
- TTWO: +12.29%
- TMUS: +6.97%
- MCK: +5.93%
- LYV: +5.45%
- AMD: +5.45%
- EA: +4.93%
- MRVL: +4.43%
- ON: +4.10%
- AVGO: +2.33%
- CZR: -0.73%
- CNC: -2.01%
- CPRT: -2.30%
- MNST: -2.86%
- MOH: -8.08%
- SMCI: -8.65%
- EPAM: -24.22%
The percentages represent the returns from the April 30th close to the May 31st close. The average performance of all 20 stocks (+4.00%), while solid, underperformed both the S&P 500 performance (+5.01%) and the NASDAQ 100 performance (+6.34%). Our biggest May winner was NVDA, which reported yet another blowout quarterly report. A bigger breakout, however, may have been that of Vertex Pharmaceuticals (VRTX), which hit an all-time high one week ago and nearly broke out again as we closed out May:
I like the relative breakout vs. biotechs ($DJUSBT) and the successful test of the rising 20-day EMA before another solid rally on Thursday and Friday. Seasonally, the 3 best consecutive calendar months for VRTX, by far, are April, May, and June. I'd expect to see another solid month ahead for VRTX and it's on our June Seasonality ChartList.
S&P 500 June Performance
Here's a breakdown of the annualized performance of the S&P 500 (since 1950) during the month of June:
- June 1-6: +32.20%
- June 7-11: -17.55%
- June 12-17: +10.36%
- June 18-27: -21.40%
- June 28-30: +28.32%
June is very similar to May. It starts off well and ends well, but there isn't typically a lot of bullishness throughout the middle 3 weeks (7th to 27th) of the month.
Sector Performance
Before we look at individual stocks, let's get an overview of how the various sectors and industries have performed during June over the past 12 years (during this secular bull market):
If you recall, as we headed into April, I discussed the fact that energy (XLE) and materials (XLB) tended to perform well in April and they did so again, especially the XLE. Last month, I pointed out that technology (XLK) and communication services (XLC) liked the month of May. The XLK actually has produced its best relative gains in May since this secular bull market began. Check out how the XLK and XLC performed in May:
It was nearly textbook as only utilities (XLU) showed enough strength to beat the XLK and XLC during May 2024.
So let's move on to June. What should we expect from a historical perspective?
Well, let me start with the fact that June is the ONLY month in which consumer discretionary (XLY) has been the clear leader during this secular bull market. Don't be shocked to see Tesla, Inc. (TSLA) come back to life. If you look towards the bottom of this report, you'll see that TSLA is one of the better historical performers in June. Looking at the XLY chart, I see a potential head & shoulders top. But it must execute and close beneath the neckline to trigger a much broader decline:
Hey, I'll be the first to admit that this doesn't look great technically. But again, I also know that a bearish pattern is NO GOOD until it executes - and they RARELY do during secular bull market advances. So I'll give the benefit of the doubt to the bulls for now. Let's see if the XLY can begin to right the ship in June. History certainly says it's a very real possibility.
Industry Performance
As expected, the key technology outperformer in May - semiconductors - used the historical bullishness of May to set a new all-time high, before cooling off a bit in late May. This month's strength is usually seen in consumer discretionary. Outside of the XLY, there's actually very little relative strength in our aggressive sectors. Within the XLY, we should look for historically leadership from automobiles ($DJUSAU), business training & employment agencies ($DJUSBE), and footwear ($DJUSFT). Of these 3, let's check out footwear, which just recovered in late May from an abysmal start to 2024:
I wouldn't exactly say that the DJUSFT is in great technical shape, but the improvement in May is quite obvious and absolutely could lead to more relative strength in the seasonally-strong month of June.
Here are all industry groups that tend to perform much better than the benchmark S&P 500 during June:
Technology (XLK):
- none
Consumer Discretionary (XLY):
- automobiles, business training & employment agencies, footwear, recreational products, clothing & accessories, specialty retailers, durable household products, broadline retailers, furnishings, toys
Communication Services (XLC):
- publishing
Industrials (XLI):
- delivery services
Financials (XLF):
- none
Health care (XLV):
- medical equipment
Consumer staples (XLP):
- nondurable household products
Real estate (XLRE):
- none
Utilities (XLU):
- none
Energy (XLE):
- coal
Materials (XLB):
- nonferrous metals
Stocks for June
We've selected our Top 20 seasonal stocks for June. Several names represent sectors and industry groups that have been discussed above. Others simply stand out in June based on their own historical track record.
The stocks this month, with average June performance, are as follows:
- ZS: +12.7%
- TSLA: +12.3%
- TTD: +9.7%
- ETSY: +8.8%
- GNRC: +8.1%
- NOW: +6.9%
- DXCM: +6.6%
- VRTX: +6.2%
- DECK: +5.2%
- ILMN: +5.0%
- PODD: +4.8%
- PAYC: +4.7%
- ANET: +4.6%
- CSGP: +4.3%
- FTV: +4.3%
- LULU: +4.0%
- OXY: +4.0%
- HOLX: +3.9%
- EW: +3.8%
- SBAC: +3.7%
A "Seasonality - June 2024" ChartList (annotated with 1 or 2 support levels to watch) will be created and will be available for viewing/download by Monday morning. 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