Chapter IV: The Traditional Seasonal Analysis of Price Trends can still yield valuable predictive information. |
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| A non-typical Seasonal Pattern is shown by Calpine. Usually, the lowest prices occur in the Fall Months. Averaged over the last 9 years, CPN exhibits a strong spread between the high and low months of 19.32 percent. For this chart, price plots for each year are traced on top of each other. Each month's value is adjusted to the mean price for the particular year. The orange line represents the average monthy price expressed as a portion of the annual price. |
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| CPN speculators might well avoid the month of September. Here, the profitability of the month is defined as the percentage change between the mean price on the first day of the month and the mean price on the last day of the month. So the figures displayed here refer to the average change during each month, rather than changes between months. A quick 14.38 percent gain has rewarded those who have speculated during the month of November. |
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| The 'Monthly Profitability' discussed above applies to holdings during the course of a single month. Another, perhaps more realistic evaluation is the one charted here. Here the value evaluated is the highest price reached at anytime during the next quarter. Investors shrewd enough to invest in Calpine during April have seen an average maximum gain of 39.33 percent at some time in the following 60 trading days. |
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This plot of the average monthly price as a proportion of the average yearly price removes the year-to-year secular trend. However the within-year trend is still intact, so it is expected that the December value might be higher than the January average, for a healthy company. Over the span of 4 months from January to May a gain of 19.32 percent has occurred historically. This is an annual rate of 58.0 percent. Investing 'against the tide' of the seasonal trend can cost an annualized 28.98 percent. Before making any decisions based on the standard 12 Month Seasonal Calendar, be sure to check the characteristics of the 24 Month Political Election Calendar. Research shows that many characteristics of the traditional seasonal averages are actually induced by events in the 24 month political cycle, so the characteristics of even versus odd numbered years may be quite distinct. |
Much Deeper Market Timing Analysis with CPN roadmap and Summary of most effective indicators: |
| In the news, Friday, February 18, 2011: An unfavorable condition has developed with Aetna Inc., ticker symbol AET. Also, there are breaking events concerning Dollar Tree, Inc. (DLTR) and First Niagara Financial Group Inc. (FNFG) |