Hot Stocks for December 1, 2022 - KSS, MPC, OSTK, TTD Seasonality

UPDATE: the actual performance of this trading basket, on a capital-balanced basis, was -0.07% ROC for the day.

For the First Trading Day of December, 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 first trading day of December.

Seasonality for The First Trading Day of December 2022

Using the Free Seasonality Almanac for traders, we can generate seasonality-related ideas for stocks to trade. In this case, we’ll look at the First Trading Day of December, which for this year is December 1 and falls on a Thursday. 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 Kohl’s Corporation, Marathon Petroleum Corp, Overstock.com Inc, and Trade Desk Inc.

For the first trading day of December, historically, KSS has 62.5 Odds of going up (which means it has moved higher on this same day 5 out of 8 years on this day), on average +1.63%, and MPC has 87.5 Odds with average moves of +1.37%. On the bearish side, historically, OSTK has 87.5 Odds of going down on average by -3.20%, and TTD has 80.0 Odds of going down on average by -2.95%.

These numbers are drawn from the previous 8 years for KSS, MPC, OSTK and previous 5 years for TTD. 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 OSTK and TTD, which may qualify as shorts, or KSS and MPC, 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 October to November (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 December.

KSS Seasonality for December 2022

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

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

The average monthly performance of KSS has averaged +4.5%, with most of the positive performance typically coming from the first trading day and last 5 trading days in December. KSS’s typical trading activity can be positive for some seasonality windows in the month, while mean-reverting to the average performance on the 3^rd Friday, Last 3 and 1 Trading Days, along with possible flat performance for other days in the month. This, along with looking at how KSS is currently performing this December, can help frame intraday or swing trades for KSS for the month.

KSS’s latest quarterly earnings report was released on November 17, 2022.

MPC Seasonality for December 2022

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

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

The monthly performance of MPC in December has averaged +1.59%, and we can see the first trading day, 1^st Friday, 3^rd Friday and Last 5-1 Trading Days of the month contribute most of the typical positive performance, followed by mean-reversion during other periods of the month. This can all help frame intraday or swing trades for MPC for the month of December, with positive performance expected at the beginning, middle and in the last week of the month.

MPC’s latest quarterly earnings report was released on November 1, 2022.

OSTK Seasonality for December 2022

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

Looking at the seasonality Timeline at the bottom, we can see OSTK historically underperforms the index during most seasonality windows, including the first trading day in December. Given the average monthly performance of -3.6%, and historical performance during other seasonality windows, this would indicate choppy and mostly negative performance during December, with only one typical period of positive performance for mid-month (9-14^th trading days). This can help frame intraday or swing trades for OSTK for other days in the month.

Over the past few years, OSTK has been particularly volatile due to outsized impacts of events such as those relating to the pandemic. This may skew the above statistics, compared to previous years’ performance. Traders could look at the individual impacts of these events during the seasonality window(s) to determine what impact this may have on how OSTK performs within these timelines.

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

OSTK’s latest quarterly earnings report was released on October 27, 2022.

TTD Seasonality for December 2022

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

Looking at the bottom timeline, we can see TTD historically underperforms the SPY during all tracked seasonality windows. Given the average monthly performance of -6.8%, this would indicate largely negative and somewhat choppy action during the most of December, with no clear (seasonal) expectation of bullish action during the month.

Similar to OSTK above, TTD has been particularly volatile due to outsized impacts of events such as those relating to the pandemic. This may skew the given statistics, compared to previous years’ performance.

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

TTD’s latest quarterly earnings report was released on November 9, 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 at the close on the last day of November and exit at the close of the first trading day of December or enter at the Open on December 1 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 underperform the S&P 500 ETF on this day. This can help set the context for December 1 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.