Hot Stocks for July 29, 2022 - ENPH, TMUS, ZEN, MU Seasonality

UPDATE: the actual performance of this trading basket, on a capital-balanced basis, was +1.13% ROC for the day.

For the Last Trading Day of July, 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 July.

Seasonality for The Last Trading Day of July 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 July, which for this year is July 29 and falls on a Friday. 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 Enphase Energy Inc, T-Mobile Us Inc, Zentek Ltd, and Micron Technology, Inc.

For the last trading day of July, historically, ENPH 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 +3.94%, and TMUS has 75.0 Odds with average moves of +1.59%. On the bearish side, historically, ZEN has 71.4 Odds of going down on average by -2.94%, and MU has 87.5 Odds of going down on average by -2.46%.

These numbers are drawn from the previous 8 years for ENPH, TMUS and MU and previous 7 years for ZEN. 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 ZEN and MU, which may qualify as shorts, or ENPH and TMUS, 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 July to early 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 July.

ENPH Seasonality for July 2022

Navigating to the second page of the Seasonality Almanac, we can take a closer look at Enphase Energy Inc's performance for the entire month of July, 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 July, while ENPH outperforms the index. Also looking in the right-hand section, we can see the top 8 bullish seasonality signals for ENPH. 

The average monthly performance of ENPH has averaged +4.7%, with most of the positive performance typically coming from the last 5-1 trading days of the month. This gives indication that ENPH’s trading action is typically choppy or muted for the first few weeks of July. Given the seasonal performance, along with looking at how ENPH is currently performing this July can help frame intraday or swing trades for ENPH for the month.

ENPH’s latest quarterly earnings report is expected to be released on July 26, 2022, which may have an impact on ENPH’s performance on July 29.

TMUS Seasonality for July 2022

Navigating to the second page of the Seasonality Almanac, we can take a closer look at T-Mobile Us Inc’ performance for the entire month of July, alongside SPY for context.

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

The monthly performance of T-Mobile Us Inc in July has averaged +7.2%, 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 TMUS can be choppy for the first few weeks of the month. This can all help frame intraday or swing trades for TMUS for the month of July, with positive performance expected mostly in last week of the month.

TMUS’s latest quarterly earnings report is expected to be released on July 27, 2022, which may have an impact on its performance on July 29.

ZEN Seasonality for July 2022

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

Looking at the seasonality timeline at the bottom, we can see ZEN historically has negative performance the index during the 3^rd Friday, last 5, 3 and 1 trading days of the month. Judging by the average monthly performance of +1.4%, along with the other seasonal timeframes, ZEN can be expected to be somewhat positive for the first part of July, with choppy action until negative performance for the last part of the month. This can help frame intraday or swing trades for ZEN for other days in July.

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

ZEN’s latest quarterly earnings report is expected to be released on Aug 4, 2022.

MU Seasonality for July 2022

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

Looking at the bottom timeline, we can see MU historically underperforms the SPY in most seasonality windows, other than mid-month. Given MU’s negative typical performance of -1.1% for the month as a whole, we can typically expect some positive movement for the beginning of the month, with a reversion to the mean negative performance during the last part of July. 

MU’s latest quarterly earnings report was released on June 30, 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 July and exit at the close of the last trading day or enter at the Open of the last day of July 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 75% 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 July 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.