Hot Stocks for August 31 - VEEV, TSLA, ULTA, OSTK Seasonality

UPDATE Sept 1: the actual performance of this trading basket, on a capital-balanced basis, was +0.09% ROC.

Coming up on the Last Trading Day of August, there are many hot stocks projected to move. The StockOdds Seasonality Dashboard provides quick insights for stocks, ETFs, or other securities likely to move in a given time period. The seasonality conditions of First and Last Trading Day of the Month are just two examples!

Seasonality for The Last Trading Day of August

Using the Seasonality Almanac, we can generate ideas for stocks to trade in August. In this case, we’ll take a look at the Last Trading Day of August, which for 2021 is August 31. On the first page of the dashboard, we can easily pick out the bottom and top performing stocks by taking into account both the average % change and Odds numbers. In this case, we’ll take a look at Veeva Systems, Tesla, Ulta Beauty and Overstock.com. 

From this, we can see on the last trading day of August, VEEV historically has 71.4% Odds of going up, on average by 4.09%, while TSLA’s Odds are 87.5% of going up, on average by 2.39%. On the short side, ULTA has 62.5% Odds of going down, on average by -2.97% and OSTK also has 62.5% Odds of going down, on average by -2.46%.

These numbers are drawn from the previous 7 years for VEEV and the previous 8 years for OSTK, TSLA and ULTA.

Traders can use this information for context as to the seasonality of ULTA and OSTK which may qualify as shorts or VEEV and TSLA which may be suitable longs. They 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 for longer and overlapping periods.

Additional Signals can be found through the Dashboards Reports or through the WebScreener.

As we near the end of the month, we will be looking 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. In the case of OSTK and TSLA, quarterly earnings are usually released at the end of July. For VEEV and ULTA, earnings are typically released around the end of August. 

This year, VEEV’s earnings announcement is on September 1, 2021 and ULTA’s earnings announcement is August 25, 2021. Knowing this, one has to take into account the effect VEEV and ULTA earnings will have on the closing price of August 31, 2021. 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 31, 2021

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

Taking a look at the bottom, we can see the historical performance of SPY has remained fairly flat on the last trading day of August, compared to VEEV, which far outperforms the index. Also looking in the right-hand section, we can see the top seasonality signals for VEEV. 

Though the monthly performance of Veeva Systems in August has averaged 9.2%, we can see most of this performance likely comes from the last 5 trading days of August, as well as the last 3 trading days of August. This can help frame intraday or swing trades for VEEV for the month of August.

TSLA Seasonality for August 31, 2021

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

Taking a look at the bottom, we can see the historical performance of TSLA outperforms the SPY. Also looking in the right-hand section, we can see the top seasonality signals for TSLA. 

Though the monthly performance of Tesla in August has averaged 12.6%, we can see a significant portion of this performance comes from the last 5 trading days of August, as well as the last 3 trading days of August. This can help frame intraday or swing trades for TSLA for the month of August.

ULTA Seasonality for August 31, 2021

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

Taking a look at the bottom timeline, we can see ULTA historically underperforming the SPY. Also looking in the right-hand section, we can see the ranked seasonality signals for ULTA from bullish down to bearish. Since ULTA is a potential short for August, we can refer from the middle to the bottom signals indicated in red to see the most bearish seasonality signals. 

Though the monthly performance of Ulta Beauty in August has averaged -1.4%, we can see the last 5 trading days has a -4.26% expectation, with the majority of the move happening on the last trading day. This indicates ULTA typically mean-reverts from positive performance earlier in August, given the last-trading-day performance is lesser than the expected performance for the month. This can help frame intraday or swing trades for ULTA for the month of August.

OSTK Seasonality for August 31, 2021

Navigating to the second page of the Seasonality Almanac, we can take a closer look at Overstock.com's performance for the entire month of August, alongside SPY for context. 

Taking a look at the bottom, historically we can see OSTK underperforms the SPY. Also looking in the right-hand section, we can see the top bullish seasonality signals for OSTK. Since OSTK is a potential short for August, we can refer to the middle to bottom to see the most bearish seasonality signals. 

Though the monthly performance of Overstock.com in August has averaged -0.85%, we can see the last 5 trading days has a -5.67% expectation, which would indicate OSTK typically mean-reverts from positive performance earlier in August. This can help frame intraday or swing trades for OSTK for the month of August.

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 of August or enter at the Open of the last day of August if conditions were favorable. Why trade probability-blind, when you can trade with the Odds! 

By taking a quick look at the summary numbers at the bottom of the dashboard (Positive & Negative Values by % Change, Percentage of Symbols outperforming relative to SPY), we can see that most stocks in the dashboard that meet our filter criteria have a negative expectation. In addition to this, we can also see that about half the stocks are expected to outperform the SPY and half the symbols are expected to underperform the S&P 500 ETF. This can help set the context for September 1, 2021 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.