Stocks To Trade In June

Here are some facts about the DJIA in June:

• From 1885 to the present:
• In all months of June: up 55.6% (135)
• In years ending in one: 38.5% (13)
• In post-election years: 54.5% (33)
• In both one and post-election years: 33.3% (6)

These weak seasonals are somewhat offset by strong momentum and excess liquidity. The result will likely be similar to May, a flat market. The first half of the month is likely to be stronger than the second half.

Here are the cycles-based trade recommendations for the DJIA stocks in this month. In May, the long trades returned an average of 1.22% versus and a rise of 1.93% in the DJIA in comparison to a return of  +0.11% for the short sales.

For the month of June, the cycle/relative strength concept is applied. First, the Dow Jones 30 stocks are ranked from the best performer to the worst by calculating the expected return in that month. The top 15 were screened as follows. The top 15 best traditional performers in the month were then screened for relative strength by a unique measure that sorts by several relevant time periods. Those that pass both screens are buys for the month. The stocks that are both weak monthly performers and weak relative performers are short sales for the month.

The seasonal screen for the month is presented below. The number of years of data is in the last column. The Times Return column shows the percent of months in which the stock rose. The Return column shows the average percentage gain in the month. The Expected Return column is the product of columns two and three. We can see that Nike has been trading for 40 years and has risen in 62.5% in all the months of June. The average return has been 0.03% and the expected return is 0.02%.

Average Performance of the DJIA Stocks in the Month of June

Of the top 15, these stocks show strong relative strength and are considered buys for the month:

Goldman Sachs

American Express 

United Health

Boeing

Walgreen Boots

Cisco

Travelers

Regarding the weakest 15, these stocks show declining relative strength and are suitable short sales:

Apple

Amgen

Intel

Procter and Gamble 

Amgen 

McDonalds

Disney

Visa

SalesForce.com

Coca Cola