GSK and F have historically underperformed during the week of Presidents Day
GlaxoSmithKline plc (ADR) (NYSE:GSK) and Ford Motor Company (NYSE:F) are enjoying broad-market tailwinds today, but history suggests their upside momentum may be short-lived. According to Schaeffer's Senior Quantitative Analyst Rocky White, both GSK and F are among the stocks that could fall after Presidents Day, if history is any indicator.
Earlier this week, White took a look at
how the market as a whole performs during short weeks, Building on that, below is a list of 25 stocks that have historically underperformed (and
here are the outperformers) during Presidents Day week, followed by the worst-performing stocks during short trading weeks, according to data from the past 10 years. For this study, 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.
Over the past decade, GSK hasn't ended a single Presidents Day week in the black, averaging a loss of 1.6%. Since early 2014, GSK has embarked on a series of lower highs and lows. The stock last week popped after earnings, but upward momentum was halted by its 200-day moving average. Today, GSK is 1.2% higher at $39.61, despite a hefty fine in the U.K.
Despite GSK's long-term struggles, option traders have maintained their bullish stances. Near-term traders have been especially call-skewed -- the stock's Schaeffer's put/call open interest ratio (SOIR) of 0.30 is lower than 95% of readings from the last 12 months. But these traders won't be picking up options cheaply today -- GSK's Schaeffer's Volatility Index (SVI) of 34% is in the 93rd percentile of its annual range
Meanwhile, option traders have been backing off of their bullish bets of F, and they may be just in time. The stock has posted positive returns during the week of Presidents Day only twice in the last 10 years, averaging a loss of 3.12% for the holiday-shortened week.
F is up 2.8% at $11.48 today, after the company reported an increase in European sales in January. The shares have underperformed the SPX over the last three months, with their 14-day Relative Strength Index (RSI) of 30 right on the edge of oversold territory. Longer-term, the stock has been in a downtrend for the past year, and has shed 18.5% so far in 2016.
The security's 50-day put/call volume ratio has risen to 0.57 -- in the 96th percentage of its range -- showing recently optimistic traders have been changing their tune. And Ford's near-term options point to historically high volatility expectations right now; the stock's SVI of 41% is higher than 89% of all readings from the past year.