Hot Stocks for February 28, 2022 - TTD, ENPH, NVAX, OSTK Seasonality

UPDATE: the actual performance of this trading basket, on a capital-balanced basis, was +0.81% ROC for the day.

For the Last Trading Day of February, 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 take a look at a few symbols that typically have either bullish or bearish performance on the last trading day of February.

Seasonality for The Last Trading Day of February 2022

Using the Free Seasonality Almanac, we can generate seasonality-related ideas for stocks to trade. In this case, we’ll take a look at the Last Trading Day of February, which is February 28 and falls on a Monday. On the first page of the dashboard, we can pick the top stocks to go long and the top stocks to short by taking into account both the Average % Change and Odds data. In this case, we’ll look at The Trade Desk, Enphase Energy, Novavax, and Overstock.com.

For the last trading day of February, historically, TTD has 100 Odds of going up (which means it has moved higher on this same day 8 out of 8 years on this day) on average +7.76%, and ENPH has 75 Odds with average moves of +5.19%. On the bearish side, historically, NVAX has 75 Odds of going down on average by -6.34%, and OSTK has 75 Odds of going down on average by -2.21%.

These numbers are drawn from the previous 8 years for ENPH, NVAX, 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 NVAX and OSTK, which may qualify as shorts, or TTD and ENPH, 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.

Additional Signals can be found through the Dashboards 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 symbols, the latest quarterly earnings are typically released sometime in 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 last trading day of February.

TTD Seasonality for February 2022

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

Taking a look at the bottom of the above screenshot, we can see the historical performance of SPY is slightly negative on the last trading day of February, compared to TTD, which far outperforms the index. Also looking in the right-hand section, we can see the top 8 bullish seasonality signals for TTD. 

The average monthly performance of TTD has averaged +21.7%, with positive performance from all tracked seasonality windows. This gives indication that TTD’s trading action typically trends up for most of February. This, along with looking at how TTD is currently performing this February, can help frame intraday or swing trades for TTD for the month.

TTD released its latest quarterly earnings report on January 13, 2022.

ENPH Seasonality for February 2022

Navigating to the second page of the Seasonality Almanac, we can take a closer look at Enphase Energy’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 ENPH outperforms the SPY in many seasonality windows. Also looking in the rightmost section, we can see the top 8 bullish seasonality signals for ENPH.

The monthly performance of Enphase Energy in February has, like TTD, averaged +21.7%, and we can see many seasonality windows contribute to this performance. However, given the negative average performance on the First Trading Day of February and 1^st Friday of February, this indicates the action in ENPH can be choppy. This can all help frame intraday or swing trades for ENPH for the month of February, with positive performance expected throughout the month.

ENPH released its latest quarterly earnings report on February 8, 2022.

NVAX Seasonality for February 2022

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

Taking a look at the seasonality Timeline at the bottom, we can see NVAX historically outperforms the index during most seasonality windows, with the largest exception the last trading day of the month. Judging by the average monthly performance of +9.8%, this means NVAX is typically up earlier in the month, then historically declines in the last trading day. This gives indication of somewhat choppy action for the latter part of the month, as well as beginning of the month with the lackluster performance on the First Trading Day and 1^st Friday of February. This can help frame intraday or swing trades for NVAX for other days in the month.

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

NVAX’s latest quarterly earnings report is expected to be released on March 7, 2022.

OSTK Seasonality for February 2022

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 February, alongside SPY for context.

Looking at the bottom timeline, we can see OSTK historically underperforms the SPY in the last 1, 3 and 5 trading days of February, while outperforming on the 3rd Friday (options expiration) as well as mid-month. Also 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 the Last Trading Day of February, we can refer to this section to see seasonality windows that indicate the least bearish performance.

Though the monthly performance of Overstock.com in February has averaged -1.8%, we can see the last 5 trading days has -6.89% expectation, which indicates OSTK typically outperforms during the beginning and middle of February, until the end where it can mean-revert back to average performance. This can help frame intraday or swing trades for OSTK for the month of February.

OSTK is expected to release its latest quarterly earnings report on February 23, 2022. This is likely to have an impact in the action on February 28 and needs to be considered when entering a position in OSTK in late February.

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 February and exit at the close of the last trading day of February or enter at the Open of the last day of February 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 (Positive & Negative Values by % Change, Percentage of Symbols outperforming relative to SPY), we can see that 74% 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 over half the stocks are expected to underperform the S&P 500 ETF. This can help set the context for February 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.