On Monday, May 31, 2021, our country celebrates honoring the military personnel who fell in support of their country. Unofficially, it marks the beginning of summer. Barbeques, family gatherings, 3-day weekend trips and vehicle purchases will ensue as warm weather begins to bring people outdoors and, yes, spend money doing so.
As a trader, you should be asking yourself, “What are people spending that money on…and how can I find the trading opportunity?”
We can make some assumptions… food, cookout equipment, outdoor furniture, car rentals, hotel stays, and plane tickets are just a few of the items that people pent up from Covid restrictions for over a year will consume with great enthusiasm.
We could then take a look at what companies sell these items and consider those stocks.
Or we could do it the smart way…the Money Calendar way, that is.
You see, history is always our best guide to forecasting the future.
So let me show you the 6 stocks that are lighting up my scanners right now…
The Top Stocks That Profit Before And After Memorial Day Every Year
You know me by now…patterns are like candy to me.
So whenever I see something happening repeatedly, right around a yearly event or date like Memorial Day…I get excited.
My Money Calendar includes a multitude of scanners that scan historical data and detect repeatable patterns, like the ones below.
Here are the big Memorial Day movers that it’s showing me in 2021:
*Enter Days Before: “0” = enter trading day AFTER Memorial Day
^Exit Days After: “0” = exit trading day BEFORE Memorial Day
As you can see, on the top of the list is RV and RV parts seller, Camping World (NYSE: CWH).
Over the past 4 years, CWH has risen an average of 20.10% when entering 10-trading days before Memorial Day and exiting the 9th trading day after. Now this is a 19-trading day trade, so not surprising that the ROI on this stock is so much higher than the rest in this list.
Car sales are also historically high around Memorial Day as dealerships lure in buyers with 3-day weekend deals and Tesla (NASD: TSLA) is no exception. Buying Tesla 5-trading days before Memorial Day and selling the 10th-trading day after yields an average 8.14% ROI over the past 10-years.
Many people also travel around the Memorial Day weekend. Online travel booking giant, Expedia (NASD: EXPE) runs up an average 5.48% entering 10-trading days before the holiday and exiting the last trading day before the holiday.
Burger anyone? It’s Memorial Day! Of course, I want one!
Fast food company, Jack-in-the-Box (NASD: JACK) runs up an average 2.36% entering the first trading day after Memorial Day and exiting 9 days later. This one has 9 winners out of the past 10 years.
What better way is there to buy today and pay tomorrow than a credit card? Visa (NYSE: V) historically runs up an average of 2.03% the 9-trading days before Memorial Day and has produced 100% winners over the past 10 years.
Home projects and cookouts are big Memorial Day events and Lowes (NYSE: LOW) proves that by running up an average of 1.52% only 2-trading days before the holiday weekend. 1.52% ain’t a bad ROI for a 2-day trade.
How to “Supercharge” Each One of These Memorial Day Movers
You may be thinking that the ROIs above are small potatoes. However…you guessed it… these returns are greatly magnified with options.
Let’s take the LOW trade for example. Last year’s Memorial Day landed on May 25, 2021.
Based on the history above, you’d have entered Lowes on Thursday, May 21, 2020 and exited the following day (2 days) on Friday, May 22, 2020.
The stock rose from $118.90 to $122.25, a 2.8% ROI.
Alternatively, you could have purchased a LOW May 29, 2020 $121 Call for $1.97 on May 21 and sold it for $2.65 the following day, a 34% return over 2 days, magnifying the ROI 12-fold.
You can expect similar results for the other trades in the list above using options.
Using options GREATLY magnifies these already respectable stock returns.
Here’s what to do if you’d like to trade options instead of the stock:
- Use the first expiration after the end date of the trade.
- Buy At-The-Money (ATM) strike calls (strike price closest to stock price).
- Enter the trade the number of days before or the day after Memorial Day shown in the chart above.
- Exit the trade after the trade length shown in the chart has been reached.
Simple!
Talk soon,
— Tom Gentile
Source: Power Profit Trades