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Jon Haghayeghi | Twitter@LoneStarQuant

Market timing is a challenging proposition, which is why it is important to consider all available information when making an investment decision. Whether a technical trader or a fundamental trader, being aware of news events, earnings reports, fundamental value, macro trends, and historical trends are all important. For the fundamental investor looking to enter a long term position or a technical trader looking for a short term move, historical trends can provide valuable insights that have the potential to increase returns (or reduce losses) on a trade.

Often when searching through the Seasonalysis database, I like to create my own universe of stocks that have strong fundamentals before doing any search. The motivation is that in the event that history does not repeat itself, I like to ensure that the position I hold has fundamental strength so I can wait for the market to reflect a fair valuation of the companies equity. Some of my best trades in recent history have been the result of the combination of great fundamentals, great timing based on historical patterns, as well as near term technical strength.

I am interested in the following large-cap that trades in line with industry, has technical support, that I don't mind holding while it pays a 2.25% dividend.

Here is an example of a trade that I might reject because the stock trades at a 50% premium to industry in terms of its earnings multiple. Additionally, the stock has and mixed technical strength.

Jon Haghayeghi | Twitter@LoneStarQuant

It has been a busy month - Greece struck a deal, U.S. companies have reported earnings, and China has banned short-selling to curb the recent 30% drop in equity prices. Many american investors are buying dips, recognizing that there has not been a 10% drawdown in the U.S. markets in the past four years and the trend can continue as rates remain low as the Fed holds 4.5 trillion in securities. With that in mind, let's take a look at a couple potential long trades.

Ace Limited has rallied ten years in a row during the three months following August. Although the stock has a beta of 1.01 (nearly perfectly correlated to the broad market), has rallied the past several weeks despite softness in the equity markets. Based on historical data, we expect the stock to rally about 8.5% over the next three months.

Nike (NKE) is a large-cap that has historically traded well in August and September.  The historical average gain is 8.5% for the 56 days starting August 5th. 

Both of the patterns listed above are great candidates for premium selling and have liquid option chains. I encourage you to get creative - there are ways to limit your downside risk without setting stop-losses. Stay smart and trade safe!

Jon Haghayeghi | Twitter@LoneStarQuant

Everyone needs extra money for Valentines Day, which is why we are here to show you trade setups for companies in the S&P500 that open in February. These stocks are highly liquid and optionable, making them great candidates for a swing position.


YUM! rallies year-after-year during the Spring. In fact, for the past 17 consecutive years YUM has rallied an average of 13% between February and May. The entry date for this trade is February 10th and exit date is May 11th.


Seasonalysis members have traded VFC several years in a row. This company has particularly strong performance through the months of February and March. On average, the 63-day rally between February 7th and April 10th yields an attractive 10.3%.


Have a shorter trade-horizon? Priceline has a great setup through the month of February until the 10th of March.