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Earlier in the week we sent our subscribers a report, which was later picked up by CNBC, on end of the quarter window dressing. The report concluded that the stocks which do best from the start of the quarter up until the start of the last week, will also outperform the market in the final five trading days of the quarter.

So far Q1 2007 is shaping up to be no different, although given the market's weakness this week, the net result is that investors following this strategy will just end up losing less than than the market overall. As the table below illustrates, the twenty best performing stocks in the Russell 1000 through 3/23 are down 0.46% through Thursdays close, while the average stock in the Russell 1000 is down 1.40%.

In terms of deciles, we end up with a similar scenario. The group of stocks with the best performance up through 3/23 (decile 1) has outperformed every other decile in the final four days of the quarter.

top twenty stocks

decile performance

Source: Undressing the Window Dressers: Top Stocks Continue End of Quarter Outperformance