2 Stocks Primed to Pop After Presidents Day

Goldcorp Inc. (USA) (NYSE:GG) tends to outperform during the week of Presidents Day, while Twitter Inc (NYSE:TWTR) fares well during short weeks

by Alex Eppstein

Published on Feb 12, 2016 at 2:19 PM

Goldcorp Inc. (USA) (NYSE:GG) and Twitter Inc (NYSE:TWTR) are shooting higher with the broader market today. But after the volatility we've experienced, some may be questioning whether the stocks' upward momentum can last (though history seems to suggest that broad-market losing streaks are often followed by outperformance). However, according to Schaeffer's Senior Quantitative Analyst Rocky White, GG and TWTR are among the stocks primed to pop after Presidents Day.

Picking up where White left off with his look at stock returns during short trading weeks, below is a list of the 25 best stocks to own during Presidents Day week over the past decade. White only looked at stocks that met the following criteria: trading above $10, as of yesterday's close; are optionable; and either trade a million shares a day or trade weekly options. As you can see, GG is one of the top performers, averaging a gain of 1.3%, and posting positive returns eight times in the last 10 years.

160212bestshortweekstocks2

A repeat performance would add to GG's recent rally -- not to mention, the strength of gold stocks more generally. Since hitting a 12-year low of $9.46 on Jan. 21, the shares have soared nearly 63% to trade at $15.40, including today's 2.7% jump.

This could have option bears on edge, considering Goldcorp Inc.'s 10-day put/call volume ratio of 1.16 across the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks just 2 percentage points from an annual high. Echoing this, GG's Schaeffer's put/call open interest ratio (SOIR) of 0.82 sits in the 99th percentile of all readings from the past year.

While TWTR may not be on the list of top Presidents Day stocks, it's actually one of the best performers during holiday-shortened weeks. White supplied the data below, which shows TWTR averages a 1.9% gain during short weeks, and has been positive over two-thirds of the time.

160212bestshortweekstocks1

Twitter Inc shares have been nothing short of astounding today, surging 9.5% to $15.67. Despite hitting a record low of $13.91 on Thursday after the company warned investors about slowing user growth, the stock is now within a nickel of last Friday's close. Perhaps traders are searching for a bargain, as TWTR's 14-day Relative Strength Index (RSI) sits at 30 -- on the cusp of oversold territory.

Still, option traders foresee TWTR eventually giving way to its longer-term headwinds. The stock's 10-day ISE/CBOE/PHLX put/call volume ratio sits at an annual high of 0.71, pointing to a healthier-than-usual appetite for bearish bets over bullish during the past two weeks.

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