Home > These Stocks Tend to Rally in August (Seasonality)

These Stocks Tend to Rally in August (Seasonality)

August is a poor month for stocks, but these stocks have still managed to climb at least 70% of the time and produce as much as 7% gains on average. Stocks mentioned: $ATO $HAE $SMG $XLNX $WTR $IIVI

Seasonality is the study of how assets perform at certain times of the year. The stocks below have shown a strong tendency to rise in August, historically. That doesn’t mean they will rally this August, though. Seasonality is best used in conjunction with other forms of analysis and specific trading strategies, such as the ones discussed in the Stock Market Swing Trading Video Course.

Before getting into the best historical August stock performers, August is historically one of the worst months of the year for stocks. Over the last 19 years the S&P 500 index has moved higher in August 53% of the time (number above columns), but overall has dropped more than 1% on average each year (number at bottom of columns). In more recent history, August has also fared poorly. For example, over the last 10 years, it is up 50% of the time, dropping on average -0.8%. Over the last 5 years, it is up 40% of the time, dropping -0.8% on average.

SPX august seasonality

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Long-term, and short-term, August has sucked. Basically, that means it will be harder to find quality opportunities in August…and our the best August stock performers listed below echo those words. The percentages are much lower than we typically see in other months.

Strong Seasonality Stocks for August

The statistics below are based on the historic monthly opening and closing prices. Therefore, gains or losses within the month may be larger than those disclosed below. For example, a statistic may say the biggest rally on a monthly basis was 15%, but during the month the stock could have been up 20%, but dropped to only finish the month up 15% (intra-month losses could also be bigger). This is why it is also recommended traders combine these statistics with other strategies, which help control risk and lock in profits.

Buying at the open and close of the month is also somewhat arbitrary. There are more precise times to take trades. Focus on seasonal opportunities that align with strategies you are already using.

This is the raw data. How you interpret it, and what you opt to do with it, is up to you.

All stocks do at least 100K in average daily volume.  All stocks with an average gain of less than 2.5% have been excluded.

74% Rally Rate

Atmos Energy Company (ATO)

Price has rallied 20 out of 27 years, or 74%.ATO seasonal tendencies

Average August gain, for all years, is 2.54%.

In the rising months (20) the average gain has been: 4.6%.

In declining months (7) the average loss is -3.33%.

Biggest gain is 13.29%, and biggest drop is -8.01%.

73% Rally Rate

Haemonetics Corporation (HAE)

Price has rallied 19 out of 26 years, or 73%.HAE seasonal tendencies

Average August gain, for all years, is 3.03%.

In the rising months (19) the average gain has been: 6.45%.

In declining months (7) the average loss is -6.28%.

Biggest gain is 25.07%, and biggest drop is -10.81%.

72% Rally Rate

Scotts Miracle-Gro Company (SMG)

Price has rallied 18 out of 25 years, or 72%.SMG seasonal tendencies

Average August gain, for all years, is 4.76%.

In the rising months (18) the average gain has been: 8.74%.

In declining months (7) the average loss is -5.47%.

Biggest gain is 37.94%, and biggest drop is -13.27%.

70% Rally Rate

Xilinx Inc. (XLNX)

Price has rallied 19 out of 27 years, or 70%.XLNX seasonal tendencies

Average August gain, for all years, is 3.59%.

In the rising months (19) the average gain has been: 8.26%.

In declining months (8) the average loss is -7.5%.

Biggest gain is 20.03%, and biggest drop is -18.68%.

Aqua America Inc. (WTR)

Price has rallied 19 out of 27 years, or 70%.WTR seasonal tendencies

Average August gain, for all years, is 3.82%.

In the rising months (19) the average gain has been: 7.82%.

In declining months (8) the average loss is -5.68%.

Biggest gain is 22.05%, and biggest drop is -11.68%.

II-VI Incorporated (IIVI)

Price has rallied 19 out of 27 years, or 70%.IIVI seasonal tendencies

Average August gain, for all years, is 7.84%.

In the rising months (19) the average gain has been: 15.14%.

In declining months (8) the average loss is -9.5%.

Biggest gain is 36.57%, and biggest drop is -21.05%

Final Word on the Strong August Seasonality Stocks

This is the raw data. What you do with it is up to you. All traders are encouraged to do their own research and apply their own strategies if utilizing these statistics.

Each stock has a different risk profile. While the ‘average gain’ statistic is a key metric, it doesn’t tell the whole story. Making 7% may seem attractive but when looking at the volatility it may be more than you are willing to handle. Therefore, look at the all the data when deciding what to trade. Also, apply other technical and fundamental metrics to help zero-in on exact entry and exit points. Seasonality is not covered in my stock trading course, because it is a not a requirement for successful trading. That said, it is an additional tool you can use.

Losing trades WILL happen. Don’t risk more than 1% of your trading account on a trade (risk = difference between entry price and stop loss price, multiplied by the number of shares). There is always a risk in trading, and you can lose much more than you expect (even when you think you are only risking 1%).

By Cory Mitchell, CMT

Disclaimer: This article should not be viewed as investment advice, and is not a recommendation for you to buy or sell. Past performance is not necessarily indicative of future performance.

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