25 Stocks to Buy Before Christmas

The SPX has historically outperformed during Christmas week

by Karee Venema

Published on Dec 21, 2017 at 11:45 AM
Updated on Dec 21, 2017 at 11:48 AM

Markets will be closed next Monday, Dec. 25, for the Christmas holiday. While the S&P 500 Index (SPX) has historically outperformed during Christmas week -- in what is typically known as a "Santa Claus rally" -- we had Schaeffer's Senior Quantitative Analyst Rocky White run the numbers to see which SPX stocks do well in the holiday-shortened week. Here's a closer look at real estate names Welltower Inc (NYSE:HCN) and HCP, Inc. (NYSE:HCP), which have been two of the best stocks to own during Christmas week.

best stocks to own during christmas week

Oversold HCN Could Bounce Next Week

Over the past 10  years, HCN has averaged a Christmas week return of 1.71% -- and boasts a 100% win rate. This would be a much-needed shot in the arm for a stock that's down almost 19% from its June 23 annual high of $78.17. In fact, HCN shares earlier hit a 12-month low of $63.26 after Jefferies cut its price target on the stock to $66 from $73, but were last seen trading at $63.63.

Amid this slide, HCN's 14-day Relative Strength Index (RSI) has dropped to 28.30 -- in oversold territory. In other words, the stock may be due for a short-term bounce just in time for Christmas.

Despite a 2Q Slump, HCP Tends to Do Well at Christmastime

HCP shares have returned an average gain of 2.06% over the last 10 Christmas weeks, and have finished in positive territory 90% of the time. The stock has also struggled in the latter half of 2017, down 24% from its June 26 annual high of $33.67. Plus, a recent rally off its late-October 52-week low of $25.09 was halted near $27.10 region -- home to a 23.6% Fibonacci retracement of HCP's second-quarter slump.

At last check, HCP stock was seen trading down 0.4% at $25.73, after Jefferies lowered its price target on the real estate investment trust (REIT) to $27 from $28. The shares have yet to reach "oversold" status, though, with their 14-day RSI most recently seen at 33.93.

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