The Wall Street Journal has a weekly section, The Score, which covers “The Business Week in 7 Stocks.”
This week caught my eye since Target (TGT) was the highlighted stock two weeks in a row. Last week, ending November 24th, TGT was down 11%, “as investors focused on rising shipping and labor costs and mounting supply-chain disruptions.”
This week: “The overall strong start to the holiday shopping season pulled up shares of several big-box retailers, including Target’s 2.8%” The second week didn’t reference the first – an odd omission for the set of readers that may take action on these blurbs.
It telegraphs a possible contrarian strategy – going countertrend to the market. Buy on the open Monday stocks that were down. Short on the open stocks that were up. Here is a spreadsheet where I’m going to test this for a while.
All seven stocks reversed direction Nov 24 to Dec 1 WSJ. So did the market, however. Still, 5 of the 7 trades in this strategy outperformed.
(NB, the 2.8% rise the WSJ has today must have been calculated from the Wednesday close, 69.26, not Friday’s close of 67.35. I’m generally not going to double check the WSJ % reports…and generally there won’t be holiday breaks with unusual trading like the Friday after a Thanksgiving.)
|Nov 24||open Monday||close Friday||% change||reversal?||Outper. S&P?|
|CVX – 3.4%||114.7||118.97||3.7||y||n|