Rahul, Interesting observation about BBY trading at it's low in January 95 and rallying the rest of the year. Let's take a look back in history to see if it does this every year. The stock had a low of 19 in Jan 94 and then rallied to 37 3/4 in April. The low in January ended up being the low for the year. So far so good. But in Jan 1995, the low was 30, in February 95 the low was 20 5/8, and in March 95 the low was 19 7/8. Oops, there goes that theory.
How about CC:
Low Jan 94: 16 1/2
High in 1994 occurred in September at 27 1/2
The stock never went lower than 16 1/2 in 1994
Low Jan 95: 22
High in 1995 occurred in October at 38
The stock made a low for the year in February at 21
Low Jan 96: 25
High so far in 1996: 38 3/4 in June
The stock hasn't gone lower than 25 so far in 1996
You may have picked up on a trend here that works for electronics retailers, but I'm not ready to say that it can be applied across the board to all retailers. I reviewed the charts on some other retailers that I follow (NOBE, HD, AZO, PIR) and they don't follow this pattern. It could be that the electronics retailers are more dependent on Christmas sales than the other retailers that I looked at. The fear of poor sales may push these stocks down in January, and then they go up when sales are actually announced. Or, it could be that these stocks rally in Mar - Oct in anticipation of good sales in the fourth quarter. Then the market sells on the news.
But even if this theory hold true, it's only November. What will happen to BBY between now and January? Possibly that's when it will hit my target of $10 and start to rally?? If that happens, we'll both be right.
Dan |
