Stock trading gets halted during the holidays when markets close. Markets in the US will be closed on Independence Day, July 4, but it’s what happens before that day that we’re talking about. It’s called the pre-holiday effect. So what effect does a holiday tomorrow bring on the stock exchanges today?
The Pre-holiday Effect
StockCharts reports that there has been a distinct behavior in the stock prices before each of the nine holidays in a year all through the 20th century, particularly the two days before the holiday. Having a clear idea of this behavior can enable you to reap some benefits even if you may be a short-term trader or a longer-term one.
Some traders generally follow a strategy of buying equities a day or more before a holiday. The short-term traders would then manage to sell immediately following the holiday. Longer-term investors would want to wait till the end of the year for selling. The advantage of both these strategies is that, since traders generally lighten their holdings by selling before the holiday they can cover any negative factors that may crop up suddenly. This increased selling causes the stock prices to sink. So you can find many stocks available in the lower range, attractive enough to buy.
All Eyes on Fed’s Potential Dovish Stance
Besides, July 4 is around the middle of the year. That’s when investors revise and review their portfolios. Right now all eyes are on the Federal Reserve, having thrown a hint that it could adopt a dovish trend though it did hold the rates steady at its most recent meeting. Should the Fed adopt a dovish trend later this year, InvestorPlace analyst James Brumley suggests Home Depot ($HD), Stag Industrial ($STAG), Amazon ($AMZN), Intuitive Surgical ($ISRG), General Electric ($GE), FireEye ($FEYE) and Anthem ($ANTM).
You can have something to celebrate this Independence Day since TradeZero offers half price short locates on the 3rd of July. Experience advanced online stock trading. Start building up your trading experience to realize what financial freedom is all about. Call us at 1 954-944-3885, or email firstname.lastname@example.org.
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