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5 Picks for Selling. 5 for Rallies. 11 Strong Sectors. 10 Weak. 1 Dog

01/02/2019 2:35 pm EST

Focus: STOCKS

John Person

CEO, John Person, Inc.

In January and for the first quarter, we have many new seasonal trend changes in multiple commodities and stock sectors, namely Energy stocks which tend to bottom after declines in Q4, says John Person. He's presenting at MoneyShow Orlando and TradersExpo New York.

This brings on average one of the best times of the year to buy badly beaten down stocks in this sector. A few names Investors can focus in on are Hess (HES) Occidental Petroleum (OXY) and Chevron (CVX)

However, we will have the first taste or observance of how the new Democratic Congress will treat both Republican colleagues and the president. Most are expecting a persistently harsh and stubborn attitude toward the president and his policies. Analysts are using the term “gridlock” but the real question is how much resistance will there be and how much time and resources will be used towards investigations, accusations and hearings against the president that will impede any new fiscal policies to pass and perhaps threaten any of the current bills that were passed like financial regulatory rollbacks. 

The New Year brings about a few stocks that have had strong positive seasonal trend reactions that begin in January, namely Best Buy (BBY) and Netflix (NFLX) based on its earnings reports. Netflix earnings report is released on January 17. 

Typically, the first few trading days bring strong buying as new money enters the market from pension funds and 401k contribution payments. Then we get a mid-month sell-off based on stocks that had strong performances from the prior year.

Inversely, we see bargain hunting or reallocation occur from stocks that were sold off before the new year for tax credit purposes get a lift.

The first month of 2019 may be different as there is a short list of stocks that both were trading near their respective 52-week highs as we ended 2018.

Here is the list of stocks susceptible for New Year profit selling: Yum Brands (YUM), McDonalds (MCD), Twenty-First Century Fox (FOX), WD-40 (WDFC) and Herbalife Nutrition (HLF).

I have looked for stocks that made the end of year “dog” list which may bring buying opportunities in the new year. The concept is simply the dogs from the prior year get sold off for tax loss credits and then become the darlings for the New Year. General Electric (GE) tops that list.

Here is the list of stocks that are susceptible for price rallies in Q-1: Colgate-Palmolive (CL), Gilead Sciences (GILD), Monster Beverage (MNST), Molson Coors Brewing (TAP) and Constellation Brands (STZ)

Strong sectors mid-January lasting through Q1: 

Energy (XOP) Homebuilders (XHB), Materials (XLB) Retail (XRT) Regional Banks (KRE) Consumer Discretionary (XLY) Gold (GLD) Gold Miners (GDX) Crude Oil (USO) Corn (DBA) Dollar Index (DXY)

Weak sectors mid-January lasting through Q1:

Utilities (XLU) Biotech (IBB) Telecoms (IYZ) Healthcare (XLV) Technology (XLK) Industrials (XLI) Financials (XLF) Insurance (KIE) Consumer Staples (XLP) Japanese yen futures (FXY)
Ironically the MoneyShow Orlando is Feb. 7-10, about the middle of the first quarter and around the peak of earnings season.

I will be giving an intensive workshop on which technical tools can help investors select stocks. We will be exploring the PPS buy and sell indicator, Relative Strength comparative analysis using the PMC Indicator along with comparing option volatility studies, and volume analysis.

These specific tools are what a majority of trading institutions and hedge funds use to help define their trade selections and are critical for retail traders to use to help them gain an edge in this ever-increasing world of computer generated algo trading signals. I look forward to seeing you at this incredible learning event soon!

Regards,

John Person

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