The timing methods point to a market low now:
- October 27th is the average low in any year
- The end-of-month period of strength is in effect
- It is also a low in the 1-4-10 year cycle
- One of the most bullish and reliable cycles is the 15 months beginning with the mid-term elections. There are 2 more months to run in this consistent cycle.
I must add that the market technical condition is not strong, but the cycles point up.
The Cycles Research stock screen identifies stocks that are strong both in terms of relative strength and cycles. The NASDAQ
NDAQ
has been correcting but has been strong in relative terms compared to other markets. These equities are likely to be leaders in any 4th quarter rally.
NVIDIA
DIA
is ranked number two in the NASDAQ screen. Relative strength has been superior for some time. The seasonality is very favorable. Price has risen in November 75% of the time for an average gain of 10.6%. From October 27th to December 27th, the shares have appreciated almost 80% of the time for an average gain of about 22% over the last 24 years. The monthly cycle is already rising, and the weekly cycle is at a low now. The stock is likely to test the former $500 high, breaking through that level by yearend.
NVIDIA Daily
NVIDIA Monthly Expected Return
NVIDIA Weekly Cycle
Amazon is ranked third in the screen. In terms of expected return, November has been the second strongest month of the year. The monthly graph is revealing. Note that this is one of the few tech giants that is not very overbought. In addition, a three-year relative strength downtrend has been reversed to the upside. The $145-$150 area is a near-term target.
Amazon Monthly
Amazon Monthly Histogram
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