Dow Stocks To Trade In February

Here is how the month of February breaks down in terms of the odds of a higher market from 4 views:

All Februarys: 53.7%

Election Year +3: 67.7%

Decennial Pattern: 53.8%

Both Election and Decennial Pattern: 66.7%

Here are the cycles-based trade recommendations for the DJIA stocks in this month. In January, the long trades returned an average of +3.1% versus a change of +2.8% in the DJIA in comparison to a return of +9.1% for the short sales. Over the last 35 months, the long stocks have risen by an amount about 55% greater than that of the short sales and 29% over the DJIA. The short sales were net negative over that time period at -8%.

For this month, the cycle/relative strength concept is applied. First, the Dow Jones 30 stocks are ranked from the best performer to the worst by calculating the expected return in that month. The top stocks were screened as follows. The top best traditional performers in the month were then screened for relative strength by a unique measure that sorts by several relevant time periods. Those that pass both screens are buys for the month. The stocks that are both weak monthly performers and weak relative performers are short sales for the month. Long trades are favored in what should be a positive month.

Here are the top five long recommendations for this month:

Caterpillar

Boeing

American Express
AXP

Disney

Travelers

Here are the top five short recommendations for this month:

3M

Johnson & Johnson
JNJ

Microsoft
MSFT

Procter & Gamble
PG

Intel
INTC