Seasonality is always on a traders radar in December. The Santa Claus rally and all.
In this seasonal vein, I ran a scan of a decent database of liquid stocks with the following idea in mind.
1) The percentage return for the last 20 trading days of the year.
2) Look back the last 8 years
3) Only show me stocks that have either all positive or all negative returns in those 8 years
As the Santa Claus rally is a seasonal feature of the markets it made sense to me to find stocks that do the same thing. Might as well get as many odds in my favor as I can.
So here’s what I found.
17 stocks have had positive returns in the last 20 trading days of the year, 8 years in a row.
The top performer was AAR Corp – symbol AIR. It’s average return over the last 8 years was a whopping 13.98%. Pretty impressive for 20 days. More impressive was the consistency. The range of returns was between 7% and 23%, so no 98% wild card distorting the pattern.
Of course there’s never any guarantee this will continue, but it’s impressive to see.
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