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Forget the Seasons: How to Look Deep Into Sectors

Althea Chang
Big Data Download

Many sectors may seem to have their own seasonal trends, such as the boost in home improvement stocks in the spring, but historical data on individual companies during narrow time periods are better performance indicators, according to one analyst."Stocks don't necessarily follow the same seasonal patterns year after year, but when certain stocks or the overall market exhibit similar trends year after year, as a trader you should take notice," said Bespoke Investment Group analyst Paul Hickey.

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Among the ten sectors in the S&P 500, consumer discretionary stocks have historically had the highest average performance at this time of year, said Hickey, who analyzed ten years of historical data for the two-week period ending April 17.

But some stocks within the sector have historically performed well while others lagged. Netflix (NFLX), Bed Bath & Beyond (BBBY) and Sherwin Williams (SHW) were consistent performers during the two-week period over the last ten years, Hickey said.

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Garmin (GRMN) is among the poor performers in the consumer discretionary sector, and among telecoms, Verizon (VZ) has been down every year for the past ten years over this two-week period.

Financial companies on average have performed well in during this time based in historical data, but those results are skewed by growth in 2009, when those companies experienced a rebound from bear market lows, Hickey told "Big Data Download."

But when it comes to individual financial stocks, First Horizon National (FHN), BlackRock (BLK), State Street (STT) and People's United Financial (PBCT) are among the poor performers, according to Bespoke's research.