Photographer: Michael Nagle/Bloomberg
Here are the cycle-based trade recommendations for the DJIA stocks in this month. In October, the long trades returned an average of 10.83% versus a change of 5.84% in the DJIA in comparison to a return of -0.23% for the short sales.
For the month of November, the cycle/relative strength concept is applied. First, the Dow Jones 30 stocks are ranked from the best performer to the worst by calculating the expected return in that month. The top stocks were screened as follows. The top best traditional performers in the month were then screened for relative strength by a unique measure that sorts by several relevant time periods. Those that pass both screens are buys for the month. The stocks that are both weak monthly performers and weak relative performers are short sales for the month.
The seasonal screen for the month is presented below. The number of years of data is in the last column. The Times Return column shows the percent of months in which the stock rose. The Return column shows the average percentage gain in the month. The Expected Return column is the product of columns two and three. We can see that Disney has been trading for 41 years and has risen in 78.05% in all the months of November. The average return has been 3.66% and the expected return is 2.86%.
Average Performance of the DJIA Stocks in the Month of November
These stocks have traditionally been the strongest in November.
Of the strongest, these stocks show strong relative strength and are considered buys for the month:
Home Depot
United Health
Walmart
Merck
Regarding the weakest, these stocks show declining relative strength and are suitable short sales:
Boeing
Verizon
Amgen
Coca Cola
Intel
Procter and Gamble
IBM
Walgreen-Boots
Johnson & Johnson
