Hot Stocks for January 3, 2023 - BLNK, GOLD, DXCM, CB Seasonality

UPDATE: the actual performance of this trading basket, on a capital-balanced basis, was +0.56% ROC for the day.

Looking for stocks to trade on the first trading day of the year? The StockOdds Seasonality Dashboard is a great resource for identifying potential bullish and bearish trade ideas in a given seasonality period. Whether you're interested in monthly, first or last trading day, mid-month, or option expiration performance, this tool can provide quick insights into which stocks, ETFs, or other securities are likely to see significant movement. In this case, we’ll look at a basket with a few symbols that typically have either bullish or bearish performance on the first trading day of January.

Seasonality for The First Trading Day of 2023

Using the Free Seasonality Almanac for traders, we can generate ideas for stocks to trade during many seasonality windows. In this case, we’ll look at the First Trading Day of January, which for this year is January 3 and falls on a Tuesday. On the first page of the dashboard, we can pick the top stocks to buy long and the top stocks to short by considering both the Average % Change and Odds data. In this case, we’ll look at Blink Charging Co, Barrick Gold Corp, DexCom, Inc, and Chubb Ltd.

For the first trading day of January, historically, BLNK has 87.5 Odds of going up (which means it has moved higher on this same day 7 out of 8 years on this day), on average +3.92%, and GOLD has 75.0 Odds with average moves of +2.78%. On the bearish side, historically, DXCM has 75.0 Odds of going down on average by -1.90%, and CB has 87.5 Odds of going down on average by -1.46%.

These numbers are drawn from the previous 8 years for BLNK, GOLD, DXCM and CB. This can be found by hovering your mouse over the expected performance (green and red) bars, as seen below, and looking at the number of Events.

Traders can use this information for context as to the seasonality of DXCM and CB, which may qualify as shorts, or BLNK and GOLD, which may be suitable longs. Traders may want to look at additional Signals for each stock individually before entering a trade to “line up the ducks” with complimentary Odds and average performance for the same day, or even for longer and overlapping periods, based on MFI, Bollinger Bands, Momentum and others. Even better would be checking the Top 10 Odds to see if these show up in the top Odds for the day.

Additional Signals can be found through the Dashboard Reports or through the WebScreener. As we near the end of the month, traders typically look at RSI and %BB values for confirming Odds and average performance.

Before taking these statistics for granted, it is important to look for factors which may have contributed to past performance. For these hot stocks, the latest quarterly earnings are typically released sometime in November and December (more details below). When it comes to earnings, there can be cases of “Buying the hype, selling the news,” which also contribute to their Odds and average performance on the first trading day of January.

BLNK Seasonality for January 2023

Navigating to the second page of the Seasonality Almanac, we can take a closer look at Blink Charging Co's performance for the entire month of January, alongside SPY for context.

Looking at the bottom of the above screenshot, we can see the historical performance of SPY is slightly negative on the first trading day of January, compared to BLNK which far outperforms the index. Also looking in the right-hand section, we can see the top 8 bullish seasonality signals for BLNK. 

The average monthly performance of BLNK has averaged +17.2%, with most of the positive performance typically coming from the first trading day, first Friday, mid-month and times outside typical seasonality windows in January. BLNK’s typical trading activity can also include negative performance for the last 5-1 trading days in the month as well. This, along with looking at how BLNK is currently performing this January, can help frame intraday or swing trades for BLNK for the month.

BLNK’s latest quarterly earnings report was released on November 8, 2022.

GOLD Seasonality for January 2023

Navigating to the second page of the Seasonality Almanac, we can take a closer look at Barrick Gold Corp’s performance for the entire month of January, alongside SPY for context.

Looking at the bottom Seasonality Timeline, we can see the historical performance of GOLD outperforms the SPY in most seasonality windows, especially on the first trading day of January. Also looking in the rightmost section, we can see the top 8 bullish seasonality signals for GOLD during the month.

The monthly performance of GOLD in January has averaged +7.2%, and we can see most seasonality windows (except for 1^st Friday) contribute to its positive performance, with mean-reversion during other periods of the month. This can all help frame intraday or swing trades for GOLD for the month of January, with positive performance expected on the first day, middle and in the last week of the month.

GOLD’s latest quarterly earnings report was released on November 3, 2022.

DXCM Seasonality for January 2023

Navigating to the second page of the Seasonality Almanac, we can take a closer look at DexCom, Inc’s performance for the entire month of January, alongside SPY for context.

Looking at the seasonality Timeline at the bottom, we can see DXCM historically underperforms the index during a few seasonality windows, especially the first trading day in January. Given the average monthly performance of +9.5%, and historical performance during other seasonality windows, this would indicate massive mean-reversion to its typical positive monthly performance outside of the given seasonality windows. This can help frame intraday or swing trades for DXCM for other days in the month.

Looking in the right-hand section, we can see the top 8 seasonality signals for DXCM, from bullish to bearish. Since DXCM is a potential short for January, we can refer to these signals to see the least bearish times to trade DXCM stock.

DXCM’s latest quarterly earnings report is expected to be released on February 9, 2023.

CB Seasonality for January 2023

Navigating to the second page of the Seasonality Almanac, we can take a closer look at Chubb Ltd’s performance for the entire month of January, alongside SPY for context.

Looking at the bottom timeline, we can see CB historically underperforms the SPY during most tracked seasonality windows. Given the average monthly performance of -1.12%, this would indicate largely choppy action during the most of January, with no clear (seasonal) expectation of significant bullish action during the month.

Looking in the right-hand section, we can see the top 8 seasonality signals for CB, from bullish to bearish. Since CB is a potential short for the First Trading Day of January, we can refer to this section to see seasonality windows that indicate the least bearish performance for the rest of the month.

CB’s latest quarterly earnings report is expected to be released on February 7, 2023.

Closing Thoughts

The Seasonality Almanac Dashboard uses close-to-close (CC) performance, so one looking to take these trades has a few options. One could enter positions at the close on the last day of December and exit at the close of the first trading day of January or enter at the Open on January 3 if conditions are favorable. There’s also the possibility of partially entering and exiting positions within these windows. 

It’s worth considering, with overnight or even intraday trades, even though one has curated a high-probability trade, the market could interfere with its own agenda (that being what is most probable to occur). Most stocks tend to be impacted by larger market moves, so it is an advantage to hedge any trades in some way. Even with this in mind, why trade probability-blind when you can trade hedged, with the Odds!

If trading the above stocks in a combined basket, it is worth considering all four stocks may not have much correlation, from being part of different industries and sectors.

By taking a quick look at the summary numbers at the bottom of the dashboard, we can see that 54% of stocks in the dashboard that meet our filter criteria have a negative expectation for the first trading day this month. In addition to this, we can also see that well over half the stocks are expected to outperform the S&P 500 ETF on this day. This can help set the context for January 3 as well.

If you’re a trader or investor, then we highly recommend that you take our Seasonality Dashboard course. In this course, not only will you learn more about why seasonality patterns exist and how to better utilize the Seasonal Almanac Dashboard but also have access to exclusive insights from some of the world's leading traders on using probability-based approaches for trading.