Best Stocks and Sectors to Start 2019

UNH and SLV could enjoy big January gains, if past is prologue

by Andrea Kramer

Published on Dec 31, 2018 at 11:26 AM

U.S. stocks are set to wrap up their worst year since the financial crisis, with the S&P 500 Index (SPX) on pace for a 6.9% loss. However, if recent history is any indicator, several stocks and sectors could be on the verge of big gains to start 2019. Among them, UnitedHealth Group Inc (NYSE:UNH) could be a blue-chip stock that shines in January, while the iShares Silver Trust (SLV) exchange-traded fund (ETF) is one to watch in the weeks ahead.

Below are the 25 best S&P stocks to own in January, based on monthly returns over the past decade, courtesy of Schaeffer's Senior Quantitative Analyst Rocky White. In order to make the list, stocks had to have at least eight years' worth of data.

Along with FAANG name Netflix (NFLX), which tops the list with a massive average January return, UnitedHealth shares made the cut. The Dow stock has ended January higher 80% of the time in the past 10 years, with an average gain of just over 4%.

best january stocks

While the SPX and Dow Jones Industrial Average (DJI) are both set to end 2018 in the red, UNH is sitting on a 13.2% gain. The stock has certainly struggled recently, though, on pace for a December loss of more than 11% -- its worst month since July 2012. The equity touched a record high of $287.94 on Dec. 4, but healthcare stocks retreated after an Obamacare ruling in Texas. At last check, UNH shares are trading just under $250 -- another 4% pop in January would place them back around $260, and above support in the $255 area.

UNH stock chart dec 31

An exodus of option bears could propel UnitedHealth stock higher, too. On the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity's 10-day put/call volume ratio of 1.36 is in the 88th percentile of its annual range. In other words, options buyers have picked up UNH puts over calls at a much faster pace then usual since the aforementioned Affordable Care Act ruling.

Meanwhile, below are the 20 best ETFs to own in January, again looking at data from the past 10 years. The iShares Silver Trust is near the top of the list, averaging the biggest gain of all at 4.59%. In the past 10 years, SLV has ended January higher seven times.

best ETFs january

While Wall Street has suffered in December, SLV has shot higher, set for a monthly gain of 8.4% -- its best month since January 2017. The ETF is now staring up at its 200-day moving average, which hasn't been toppled on a daily closing basis since June. For 2018, however, SLV is still on pace for a loss of nearly 10%. From its current perch around $14.44, another 4.59% gain would place it around $15.10 -- back above the aforementioned trendline -- to start February.

SLV ETF chart dec 31

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