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  • 4 Stocks To Trade For The January Effect 0 comments
    Dec 24, 2012 2:17 AM | about stocks: LGF, PCYC, SPY, V

    4 Stocks to Trade for the January Effect

    Labels: HDFC, LGF, PCYC, SPY, V


    The "January Effect" is the averagely overall good performance of stocks in the month of January. Buying stocks with strong uptrend is a good way to capture the January boost in 2013. Reminder: Don't hope for a down around of a stock just because of January Effect. A big breakdown could negate the possibility of January Effect.

    (click to enlarge)
    HDFC Bank Ltd. (NYSE: HDB) has shown a strong up trend since June. Now, the stock is trading within the uptrend channel and moving towards support at around $40.27. My target is $45 before February 2013. Even a close below $40.00 is yet not the perfect sell signal. I would put a stop at $37.00 for a stock with strong uptrend like this.

    (click to enlarge)
    Lions Gate Entertainment Group. (NYSE: LGF) started an uptrend after good reviews of the movie "Hunger Game." It is also closing around support in the channel. MACD above to cross signal line. As long as it stays above last month's low of $14.5, uptrend still enacts and there is a big room to capture profits as we have a wide channel on chart.

    (click to enlarge)
    Pharmacyclics, Inc. (NASDAQ: PCYC) shows support from MA(50) and the neckline. Friday's candlestick is a hammer on chart, which is an important signal for reversal. Once again, I think the current trading price of PCYC is a great opportunity for entry.

    Visa, Inc. (NYSE: V) has been in a strong uptrend since June with a fairly tight channel. Technically, Visa is under a strong uptrend no matter January effect occurs or not. But if it does, I could get to $165 region easily.

    (click to enlarge)

    S&P 500 (NYSE: SPY) The index has been doing well mid-week on positive economic data but fell sharply due to failure to reach an agreement on fiscal cliff solution. If there is no agreement in the coming 8 days, Jan. 1, 2013 tax hike could send the U.S. back into recession. I believe an agreement would eventually come. No one wants to take blame on sending the U.S. into recession again.

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    I will be on a flight to Hong Kong when market opens tomorrow. Due to the time difference, I will be positing blog entry very late in night. I suggest my views to follow me on Twitter as well as subscribe by E-mail.

    Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in PCYC, LGF over the next 72 hours.

    Stocks: LGF, PCYC, SPY, V
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