Signal Says Drug Stock Poised for a Big Labor Day Week

Plus 24 other stocks that tend to outperform during Labor Day week

Patrick Martin
Sep 3, 2020 at 10:55 AM
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Next Monday, the country will enjoy a much-needed day off on Labor Day, as summer comes to an official close. Ahead of the holiday-shortened week and the start of a new month, investors are looking for an edge. One name to keep an eye on as summer comes to a close is drug stock Eli Lilly (NYSE: LLY).

Best Labor Day 2020

Above are the 25 best S&P 500 (SPX) stocks to own during Labor Day week, looking back 10 years. Stocks had to have at least eight years' worth of returns to make the list, which was cultivated by Schaeffer's Senior Quantitative Analyst Rocky White. As you can see, LLY stock has generated one of the healthiest average returns, at 1.9%, and has ended the week higher 90% of the time, one of three stocks to boast a 90% win rate.

At last check, LLY was trading at $152.56, after Morgan Stanley upgraded the drug stock to "overweight" from "equal-weight." The analyst in coverage waxed optimistic about the company's pipeline of diabetes and Alzheimer's treatments. Up 15% in 2020, support has emerged at the shares' 200-day moving average.  

Daily Stock Chart LLY

The good news for options traders is the security's Schaeffer's Volatility Index (SVI) stands up at 30% -- in the 21st percentile of its annual range. This indicates near-term option traders are pricing in extremely low volatility expectations right now


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