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| | | The Best Ways to Trade Stocks in January
Trading small-cap stocks in January is a bit different than any other time of year. If you do it right, you will be singing the James Brown classic "I Feel Good" by month's end. If you do not succeed, you will be singing the blues. This is especially the case for the first few trading days of the New Year. With this backdrop, I give you the best ways to trade stocks in January.
Ride 'em Cowboy
Each year, a high flyer emerges either at the tail-end of December or the early part of January. Identify it, ride it and sell it. A perfect example is WPCS International Inc. (NASDAQ – WPCS). The company announced last week that it launched the first trading platform to enable Bitcoin traders and industry researchers to access market data and execute orders on the five most popular Bitcoin exchanges in a single application. That is huge, as the current disparate information and trading details make execution and trading less than smooth. Given the manic popularity of Bitcoins and the fact that WPCS has now emerged as the first publicly traded pure play on Bitcoins, it is no surprise the stock was up 80% in pre-market trading, following the news. Situations like WPCS tend to have huge moves that triple in short order but it could also flame out after a week or so. Given the small float, it could last longer. Still, the key is to not be greedy and sell quickly. You can't go broke taking a profit, after all.
To read more click here >> or visit http://www.thestockjunction.com
Welcome to the January Effect
We talk a lot about seasonality because most investors' gains occur during big but short runs in the market, and oftentimes, these big runs occur from the last week of December through January of the upcoming year. This year it is a little different than most because of the big moves already recorded in the Russell 200 Index (over 33% year to date) and its surprisingly strong upward momentum in recent days. Some market watchers view this recent performance as a sign that a seasonal trend/rally called the January Effect may have already begun. However, we believe it is representative of a narrow rally rather than the commencement of the January Effect since it has not been a scenario where a rising tide lifts all boats. Instead, we believe that we have experienced a small Santa Claus rally that will morph into a sustained and broad movement.
There are multiple definitions associated with the January Effect and its related Santa Claus rally moniker. In a nutshell, the January Effect is an historical Wall Street moniker for the belief that small-cap stocks outperform large caps from January through June, with the trigger based upon catalysts mentioned above. In fact, this event has occurred for 28 of the past 34 years, which is an 84% accuracy rate!
To read more click here >> or visit http://www.thestockjunction.com
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