October to April is generally a favorable time to own stocks but within this period lies another smaller period that provides even better odds for success for technology stocks. Our research – combined with others industry watchers including Stock Trader’s Almanac – have found seasonal tendencies within Technology sector that could be profitably traded towards the long side between March and May timeframe.
With our proprietary algorithm to generate entry and exit signals we have put together a portfolio of sector ETFs, which produces a very healthy return over the long term. Since 2000, our strategy has produced 39 trades with a winning rate of 92.3%. The average gain has been 13.2% with 77 calendar days holding period giving an annualized rate of 62.8%. The compound rate of return is 134% compared to S&P 500’s return of 28% for the corresponding period. Last year, this strategy gave a net gain of 2.4% within 70 days for an annualized rate of 12.4%. The corresponding figures were 1.5% and 8% for 2012, 1.5% and 8.1% for 2011 and 7.9% and 30.1% for 2011 and 48% and 243% for 2009. There were no trades in 2010 for this strategy.
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We start looking for entry signals starting middle of February. Once our entry signals are triggered we will send out trading alerts.