Hot Stocks for February 1, 2023 - EBAY, QRVO, PLUG, PGR Seasonality

UPDATE: the actual performance of this trading basket, on a capital-balanced basis, was +0.35% ROC for the day.

Looking for stocks to trade and want to plan ahead of time? 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 February.

Seasonality for The First Trading Day of February 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 February, which for this year is February 1 and falls on a Wednesday. 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, and also taking into account outliers that may skew the data. In this case, we’ll look at eBay Inc, Qorvo Inc, Plug Power Inc, and Progressive Corp.

For the first trading day of February, historically, EBAY 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 +3.09%, and QRVO has 85.7 Odds with average moves of +2.91%. On the bearish side, historically, PLUG has 75.0 Odds of going down on average by -1.49%, and PGR has 100 Odds of going down on average by -1.43%.

These numbers are drawn from the previous 8 years for EBAY, PLUG and PGR and previous 7 years for QRVO. 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 PLUG and PGR, which may qualify as shorts, or EBAY and QRVO, 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 January and February (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 February.

EBAY Seasonality for February 2023

Navigating to the second page of the Seasonality Almanac, we can take a closer look at EBay Inc's performance for the entire month of February, 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 February, compared to EBAY which far outperforms the index. Also looking in the right-hand section, we can see the top 8 bullish seasonality signals for EBAY. 

The average monthly performance of EBAY has averaged +4.9%, with most of the positive performance typically coming from the first trading day and mid-month seasonality windows in February. EBAY’s typical trading activity can also include some mean-reversion to typical monthly performance in between seasonality windows, amongst the notable negative performance for the last 5-1 trading days in the month. This, along with looking at how EBAY is currently performing for the past month, can help frame intraday or swing trades for EBAY for February.

EBAY’s latest quarterly earnings report is expected to be released on February 22, 2023.

QRVO Seasonality for February 2023

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

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

The monthly performance of QRVO in February has averaged +4.0%, 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 QRVO for the month of February, with positive performance expected on the first day, middle and in the last week of the month.

QRVO’s latest quarterly earnings report is expected to be release on February 1, 2023 after market close. This may have a significant impact on QRVO’s performance during the first trading day, as investors and traders prepare for the earnings release.

PLUG Seasonality for February 2023

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

Looking at the Seasonality Timeline at the bottom, we can see PLUG historically underperforms the index during the first two seasonality windows, especially the first trading day in February. Given the average monthly performance of +4.1%, and historical performance during other seasonality windows, this would indicate choppy or muted action outside of the given seasonality windows. This can help frame intraday or swing trades for PLUG for other days in the month.

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

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

PGR Seasonality for February 2023

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

Looking at the bottom timeline, we can see PGR historically underperforms the SPY during the first and last two seasonality windows. Given the average monthly performance of +3.0%, this would indicate largely muted or choppy action during the most of February, with an expectation of gradual bullish action during the month.

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

PGR’s latest quarterly earnings report is expected to be released on January 25, 2023, wich may have an impact on PGR’s performance on February 1.

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 January and exit at the close of the first trading day of February or enter at the Open on February 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, due to differing industries and sectors.

By looking at the summary numbers at the bottom of the dashboard, we can see that 58% of stocks in the dashboard that meet our filter criteria have a positive expectation for the first trading day this month. In addition to this, we can also see that over half the stocks are expected to underperform the S&P 500 ETF on this day. This can help set the context for February 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.