Hot Stocks for August 31, 2022 - VEEV, TSLA, ULTA, BIDU Seasonality

UPDATE: the actual performance of this trading basket, on a capital-balanced basis, was -1.81% ROC for the day.

For the Last Trading Day of August, there are many hot stocks projected to move significantly. The StockOdds Seasonality Dashboard provides quick insights for stocks, ETFs, or other securities likely to move in a given seasonality period such as monthly, first or last trading day, mid-month or 3rd Friday (option expiration) performance. In this case, we’ll look at a few symbols that typically have either bullish or bearish performance on the last trading day of August.

Seasonality for The Last Trading Day of August 2022

Using the Free Seasonality Almanac, we can generate seasonality-related ideas for stocks to trade. In this case, we’ll look at the Last Trading Day of August, which for this year is August 31 and falls on a Wednesday. On the first page of the dashboard, we can pick the top stocks to trade long and the top stocks to short by considering both the Average % Change and Odds data. In this case, we’ll look at Veeva Systems Inc, Tesla, Inc, Ulta Beauty, Inc, and Baidu, Inc.

For the last trading day of August, historically, VEEV has 71.4 Odds of going up (which means it has moved higher on this same day 5 out of 7 years on this day), on average +4.09%, and TSLA has 87.5 Odds with average moves of +2.39%. On the bearish side, historically, ULTA has 62.5 Odds of going down on average by -2.97%, and BIDU has 62.5 Odds of going down on average by -1.16%.

These numbers are drawn from the previous 8 years for TSLA, ULTA and BIDU and previous 7 years for VEEV. 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 ULTA and BIDU, which may qualify as shorts, or VEEV and TSLA, 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 late August (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 last trading day of August.

VEEV Seasonality for August 2022

Navigating to the second page of the Seasonality Almanac, we can take a closer look at Veeva Systems Inc's performance for the entire month of August, 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 last trading day of August, while VEEV outperforms the index. Also looking in the right-hand section, we can see the top 8 bullish seasonality signals for VEEV. 

The average monthly performance of VEEV has averaged +9.2%, with most of the positive performance typically coming from the last 5-1 trading days of the month. This gives indication that VEEV’s trading action is typically choppy or muted for the first few weeks of August. Given the seasonal performance, along with looking at how VEEV is currently performing this August can help frame intraday or swing trades for VEEV for the month.

VEEV’s latest quarterly earnings report is expected to be released on August 31, 2022, after market close, which may have a significant impact on VEEV’s performance on the day session.

TSLA Seasonality for August 2022

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

Looking at the bottom Seasonality Timeline, we can see the historical performance of TSLA far outperforms the SPY primarily during the last 5-1 trading days of August. Also looking in the rightmost section, we can see the top 8 bullish seasonality signals for TSLA during the month.

The monthly performance of Tesla, Inc in August has averaged +12.6%, and we can see part of the typical performance comes from the last 1-5 trading days of the month. Given the mixed performance during other seasonality windows in the month, this indicates the action in TSLA can be muted for the first few weeks of the month. This can all help frame intraday or swing trades for TSLA for the month of August, with positive performance expected mostly in last week of the month.

It’s worth noting TSLA is possibly a short candidate on September 1^st, from its past seasonal performance as well.

TSLA’s latest quarterly earnings report is expected to be released on October 19, 2022.

ULTA Seasonality for August 2022

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

Looking at the seasonality timeline at the bottom, we can see ULTA historically has negative performance versus the index during the first trading day, mid-month and last 5-1 trading days the month. Judging by the average monthly performance of -1.4%, along with the other seasonal timeframes, ULTA can be expected to be somewhat positive for the first part of August with choppy action, until negative performance for the last part of the month. This can help frame intraday or swing trades for ULTA for other days in August.

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

ULTA’s latest quarterly earnings report was released on August 25, 2022, which may have an impact on performance on August 31, 2022.

BIDU Seasonality for August 2022

Navigating to the second page of the Seasonality Almanac, we can take a closer look at Baidu, Inc’s performance for the entire month of August, 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 last trading day of August, while BIDU far underperforms the index. Also looking in the right-hand section, we can see the top 8 seasonality signals for BIDU from bullish to bearish. 

Looking at the bottom timeline, we can see BIDU historically underperforms the SPY on the first and last 5-1 days of the month. Given BIDU’s typical negative performance of -2.6% for the month as a whole, we can typically expect some negative movement for the very beginning and end of the month, with a reversion to mean performance during mid-August. 

BIDU’s latest quarterly earnings report is expected to be released on August 30, 2022, before market open, which may have a significant impact on BIDU’s performance on August 31, 2022.

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 on the second-last trading day of August and exit at the close of the last trading day or enter at the Open of the last day of August if conditions are favorable. 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!

By taking a quick look at the summary numbers at the bottom of the dashboard, we can see that 64% of stocks in the dashboard that meet our filter criteria have a negative expectation for the last trading day this month. In addition to this, we can also see that half the stocks are expected to outperform/underperform the S&P 500 ETF. This can help set the context for the last trading day of August 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.