Apple Inc. (NASDAQ:AAPL) peaked at $215.31 on May 1, marking its highest point since Nov. 7. The shares of the iPhone maker have since shed nearly 18% -- set to snap their four-month winning streak -- amid increasing U.S.-China trade tensions. However, if history is any guide, the FAANG stock could be ready to bounce back this summer.

According to Schaeffer's Senior Quantitative Analyst Rocky White, AAPL has been one of the best stocks to own on the S&P 500 Index (SPX) during the June-through-August period. Specifically, over the past 25 years, the stock has averaged an 11.6% gain over the three-month period -- the second-highest on the list -- boasting a 76% win rate. Based on its current perch at $176.97, another move of this magnitude would have Apple shares trading near $200 by Labor Day.

Skepticism toward Apple stock among options traders has surged in recent weeks. At 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 1.00 ranks in the 100th annual percentile, meaning puts have been bought to open over calls at an extreme clip.

Echoing this, AAPL's gamma-weighted Schaeffer's put/call open interest ratio (SOIR) rests at a top-heavy 1.43, indicating near-the-money puts outweigh near-the-money calls in the front three-months' series of options. This could create tailwinds for the security, as the hedges related to these bets begin to unwind.

Plus, there's the potential for upgrades to draw buyers to Apple's table, should the FAANG stock stage another summer rally. Although the average 12-month price target of $213.86 is a healthy 20% premium to current levels, 12 of 26 analysts maintain a lukewarm "hold" rating on the equity.

Stocks are performing wonderfully this year; the S&P 500 Index (SPX) is on pace for a double-digit percent gain through May, for just the second time since 2000. We are, however, heading into the most bearish part of the year. The next three months, June through August, is the only three-month stretch to average a loss over the past 25 years. Seasonality doesn’t look to be on our side, but what if we break it down in some other ways? Also, I list some individual stocks that have tended to buck this trend. 

What to Expect from the June-August Period

Generally speaking, the June through August period has been bearish for the stock market. This year has, so far, been an outstanding year, so does this mean strong momentum through May tend to carry on through the summertime?

The two tables below offer some insight. The first table looks back 25 years, and I break down the June through August returns based on the year-to-date returns through May. Looking at double-digit returns through May only yields four results, so looking at times the S&P 500 gained at least 7.5% through May, the next three months were essentially flat, with 63% of the returns positive. That's only slightly better than the typical June-August returns shown in the table above.

When you look farther in history, back to 1950 when the index is up 10% or more through May, the next three months are better than at other times. Those 18 occurrences show an average three-month return for the S&P 500 of 2.42%, with 78% of the returns positive. Looking at the table below, it seems the better the market does through May, the better it tends to do over the next three summer months. 

How Stocks Have Performed in Similar Years

Here’s another interesting way to look at it. Going back to 1950, I found the January through May charts most resembled the chart this year. The four years that most resemble 2019 (at least using the method I used), are 1967, 1961, 1976 and 1991. I have the full 12-month charts for those years below. Each of those years saw strong rallies at the beginning of the year, which seem to stall after the first few months. The returns look to chop around a bit over the next few months. On the bright side, each of those four similar years all finished higher by the end of the year.

Here’s some data on the 10 years with the most similar looking chart. The 10 years that looked most like 2019, so far averaged a gain of 9.8% for the rest of the year, with nine of the returns positive. This is promising. Other years averaged a rest-of-year gain of 4%, with 66% of the returns positive.

Looking only at the next three months, the table below shows the index returns are nearly right in line with the typical returns. This supports what we see in the chart. Those most similar years looked to be relatively flat for the next few months, but they all ended higher for the rest of the year.

Stocks that Buck the Summer Trend

Just because the SPX has tended to struggle over the June through August months doesn’t mean there haven’t been buying opportunities. The table below lists the 25 best S&P 500 stocks over the past 25 years, for the three months from June through August. Stocks needed at least 10 years of data to be considered. Some popular tech names, including Apple (AAPL), Microsoft (MSFT), and Google (GOOGL) made the list.

The shares of Alibaba Group Holding Ltd (NYSE:BABA) are up 1.8% in electronic trading this morning, after Stifel added the Chinese e-commerce concern to its "select list." The brokerage firm believes the stock's pullback due to trade war tensions presents a buying opportunity for long-term investors.

Since breaking into the $195 level to start the month, Alibaba stock has had quite the pullback, shedding 20% as of night's close at $156. The shares breached their 160-day moving average on Wednesday, and despite today's pop, are headed toward their third straight weekly loss of 4.5% or more. Plus, heading into today, the security's 14-day Relative Strength Index (RSI) stood at 28, in oversold territory.

Should a rally ensue, it could be sustained by a continued exodus of bearish bettors. Short interest fell by 1.9% in the most recent reporting period, yet the 109.02 million shares sold short represents a healthy 8% of BABA's total available float. At the stock's average pace of trading, it would take more than two weeks for traders to buy back their bearish bets.

There's also pessimism to be unwound in the options pits. The security's Schaeffer's put/call open interest ratio (SOIR) of 0.93 ranks in the elevated 74th annual percentile, meaning short-term speculators are much less call-skewed than usual. 

The good news for traders is that short-term BABA options are attractively priced at the moment, historically speaking. The security's Schaeffer's Volatility Index (SVI) of 33% ranks in the 23rd percentile of its 12-month range, meaning near-term contracts are pricing in relatively low volatility expectations.

Foot Locker, Inc. (NYSE:FL) stock is trading down 13.2% ahead of the bell, set to open below its late-November lows. Earlier this morning, the athletic apparel retailer reported first-quarter adjusted earnings of $1.53 per share on $2.08 billion in revenue -- missing analysts' estimates. The company also said same-store sales rose a less-than-expected 4.6% over the three-month period.

Should today's pre-market downside hold through the close, it would mark FL stock's worst day since Aug. 18, 2017, when it plunged 27.9%. Plus, the equity is on track to slice through its 320-day moving average -- a trendline not breached on a daily closing basis since May 2018. More recently, the shares have shed nearly 19% from their early April high above $65, and settled last night at $52.83, just below their year-to-date breakeven mark.

Skepticism was building ahead of FL's earnings report. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 10-day put/call volume ratio of 0.82 ranks in the 73rd annual percentile, meaning puts have been bought to open relative to calls at an accelerated pace in recent weeks.

The retail stock is heavily shorted, too. The 10.60 million shares currently dedicated to these bearish bets account for 9.5% of Foot Locker's available float, or 5.4 times the average daily pace of trading.

Analysts, meanwhile, have room to adjust their bullish outlooks. While eight of the 15 covering brokerages maintain a "strong buy" rating on FL stock, the average 12-month price target of $71 is a 34% premium to last night's close.

Retail giant Abercrombie & Fitch Co. (NYSE:ANF) has pulled back from its May 3 three-year-peak of $30.63. However, while just last Thursday the equity fell to its 100-day moving average, this mark is home to the stock's March post-bull-gap levels. The shares also still carry a 22.4% year-to-date lead, and this afternoon were last seen up 2.3%, at $25.18. ANF options traders may be gearing up for the Hollister parent's quarterly report, slated for before the bell tomorrow, May 29.

Looking at ANF's earnings history, the retailer has closed higher the day after reporting in its last six earnings, including a more than 20% surge for the past two in a row. Over the past two years, the shares have swung an average of 16.1% the day after earnings, regardless of direction. This time around, the options market is pricing in a larger-than-usual 20.4% swing for Wednesday's trading. 

Moving onto analyst sentiment, those covering Abercrombie stock have been far from optimistic. Specifically, all 11 brokerages sport a tepid "hold" or worse rating on the stock, with not a single "buy" in sight. Further, ANF's average 12-month price target of $24.50 comes in 2.7% below current trading levels.

African e-commerce issue Jumia Technologies (NYSE:JMIA) is seeing unusual options volume today, after short seller Citron Research once again weighed in on the firm. Just a few weeks after calling JMIA stock "worthless" and accusing the company of fraud, Citron today said it now has "indisputable evidence" of "manipulated financials and FAKE ORDERS." Against this backdrop, Jumia shares are down 1.8% at $22.98.

The "Amazon of Africa" priced its initial public offering (IPO) at $14.50 in April, the mid-point of its expected range. The stock debuted in the U.S. on April 12, opening at $18.95, and peaking at $49.77 five days later. More recently, though, JMIA shares touched a record low of $18.13 on May 10 -- the session after the first Citron note -- and have subsequently struggled beneath the $25-$27 area, which is also home to the equity's closing price of $25.46 on its first day of trading.

At last check, the security has seen more than 8,000 calls and 6,600 puts change hands already today. For context, the stock has averaged daily volume of fewer than 3,300 calls and 4,800 puts.

Digging deeper, it looks like some speculators are shrugging off Citron's latest note, buying to open the June 25 call, which is the most popular option so far. By purchasing the calls to open, the buyers expect JMIA shares to rebound north of $25 before the options expire on Friday, June 21.

On the flip side, it appears some bears may be buying to open the June 25 put. Vanilla put buyers here expect Jumia stock to sink beneath the $25 level before the front-month options expire in a little over a month.

Although call volume is outpacing put volume so far today, near-term open interest is put-skewed. In fact, JMIA's Schaeffer's put/call open interest ratio (SOIR) stands at 1.50, indicating that put open interest is roughly 50% higher than call open interest, looking at options that expire in the next three months. The June 20 put is home to peak open interest among all series, with more than 5,300 contracts in residence.

As we highlighted in our Midday Market Check newsletter, semiconductor stock Advanced Micro Devices, Inc. (NASDAQ:AMD) is surging today, last seen up 12.1% at $29.63, as investors react bullishly to the company's new line of Ryzen CPUs. Call volume is running in the 96th annual percentile thanks to heavy attention for the weekly 5/31 series, where data points to buy-to-open activity at all strikes 28 through 30. The 30-strike call is also popular in the weekly 6/7 series.

This puts AMD on pace for its highest close since early October. It's been seeing support from the 50-day moving average, and now sports a year-to-date lead north of 60%.

Also seeing unusual options trading is Uber Technologies Inc (NYSE:UBER), where the weekly 5/31 40-strike put is leading the way with almost 8,000 contracts traded. New positions have been opened near the ask price, indicating buy-to-open action is taking place. UBER stock has only closed below $40 twice since going public earlier this month, and this price point served as a floor back on May 23. The shares were last seen trading down 1.3%, at $40.97.

Finally, Zynga Inc (NASDAQ:ZNGA) options are hot after the company announced it would sell and lease back its San Francisco headquarters in a $600 million deal. There's heavy activity at the September 6 call, where it looks likely traders are closing out of positions now that ZNGA stock is trading at $6.18, up 2% on the day.

Blue chip Visa (V) is outperforming on the Dow today, while investors continue to digest President Donald Trump's trade comments. Three other stocks making moves this afternoon are Texas-based Soliton Inc (NASDAQ:SOLY), commodity name United States Steel Corporation (NYSE:X), and streaming concern Roku Inc (NASDAQ:ROKU). Below, we will dive into what is moving the shares of SOLY, X, and ROKU.

SOLY Stock Surges on FDA Approval

Shares of SOLY are up an unheard of 119% at $12.49 this afternoon, earlier coming within a penny of their all-time high of $15, after the company's "Rapid Acoustic Pulse" tattoo removal device received approval from the Food and Drug Administration (FDA). The news comes just days after it was rumored to be in line for receiving quick FDA approval. Soliton stock has already added 43% for the quarter, and today is at the top of the Nasdaq.

Steel Stock Sinks on KeyBanc Analyst Blow

United States Steel stock is down 2.8% at $13.79, and just off a nearly three-year low of $13.16 from earlier, after KeyBanc analyst Philip Gibbs said global production outside China will remain muted as international trends showcase "challenged global steel spread environment in 2019." X has already shed 27% year-to-date.

Short interest on U.S. Steel has increased 29% during the past two reporting periods, and now accounts for 13% of the stock's total available float. At the security's average pace of trading, it would take shorts just over two days to buy back their bearish bets.

Roku Falters on Analyst Bear Note

Meanwhile, streaming service ROKU is down 6.7% at $89.28, after brokerage firm Stephens slammed the equity with a downgrade to "equal-weight" from "overweight." The analyst note cited elevated expectations among investors, and also suggested the U.S.-China trade war could increase the price of streaming services -- though it acknowledged Roku was better positioned than some rivals. Prior to today's pullback, Roku touched a record high of $95.95 just last Friday, and remains 131% higher year-over-year.

Analysts were optimistic toward ROKU as of Friday's close, with nine of 16 covering firms sporting a "buy" or "strong buy" rating. Interestingly, however, the security's average 12-month price target of $79.24 comes in at a 10% deficit to current levels.

Most tech stocks have struggled in May, but NCR Corporation (NYSE:NCR) is a little more than two weeks removed from an annual high of $33. While the shares are down 1.5% to trade at $31.26 today, a rebound could be imminent if this bullish signal is any indicator. 

Specifically, the stock's Schaeffer's Volatility Index (SVI) of 32% ranks in the 15th percentile of its annual range. This indicates short-term options are cheap, from a volatility perspective. Per data from Schaeffer's Senior Quantitative Analyst Rocky White, the two other times since 2008 that NCR was trading within 2% of a new 52-week high while its SVI was ranked in the bottom 20th percentile of its annual range, the equity averaged a one-month gain of 10.38%.

From its current perch, a similar jump would put the equity above $34 for the first time since a March 2018. Year-over-year, NCR is clinging to its breakeven point, but has added 34% in 2019. 

Short sellers have been hitting the exits, and a continued exodus could create tailwinds. Short interest fell 6.9% in the two most recent reporting periods, to 7.72 million shares, the lowest amount since July 2018. However, this still represents a healthy 6.5% of NCR's total available float, and nearly 13 days' worth of pent-up buying power, at its average pace of trading.

Plus, in the options pits, puts have reigned in popularity, despite light absolute volume. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), 1,258 NCR puts were bought to open in the past two weeks, compared to just 511 calls. The resultant put/call volume ratio of 2.46 ranks in the elevated 89th percentile of its annual range, pointing to a healthier-than-usual appetite for long puts lately. An unwinding of these bearish bets could support the tech stock in the short term.

Subscribers to Schaeffer's Weekend Trader Alert newsletter just doubled their money with our Zscaler (ZS) August 60 call option recommendation. Below, we'll explain how this options trade hit its 100% target during a period of time where the tech stock rose just under 30% on the charts.   

When we initially recommended the call in an early March email to subscribers, Zscaler stock had risen almost 51% year-to-date, thanks to an impressive post-earnings bull gap. We also made a strong contrarian case for more upside for the stock, as sentiment data surrounding ZS did not seem properly aligned on this outperformer. 

Making this trade even more attractive was the Schaeffer’s Volatility Index (SVI) of 44%, a gauge of near-term volatility expectations that ranked in the bottom percentile of its annual range, telling us it could be a good time to buy premium.

Plus, short seller's tight grip began to loosen on the stock, with short interest dropping 7.3% in the last two reporting periods, likely providing some tailwinds on the charts, allowing subscribers to to achieve 100% profits on their ZS August 60 calls on Thursday, May 16 -- less than five weeks from our initial recommendation. 

We're always digging through data from Schaeffer's Senior Quantitative Analyst Rocky White, and this week Ross Stores, Inc. (NASDAQ:ROST) popped up as a name to watch. Considering what's been happening in the retailer sector, we figured we'd take a closer look at ROST stock, especially since the company reports earnings after the close tonight.

Starting with White's data, the security has pulled back to the 200-day moving average, and the prior three signals of this type have all produced one-month gains, with an average rise of 12.7%. The stock was last seen trading at $94.22, so another move of this type would put it above $106 -- all-time high territory. Of course, an ugly turn in the earnings booth could render this technical data meaningless.

An ugly outcome is exactly what Ross Stores gave bulls this time last year, when it fell 6.8% the day after earnings. Overall, it's moved 5.7% in post-earnings sessions during the past two years, and this time the options market is pricing in a 6.6% swing for Friday's trading. As for sentiment, bulls have been in control, based on the high levels of call buying seen in recent days at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX).

Meanwhile, most analysts have handed out "strong buy" recommendations on ROST, though nine still have tepid "holds" on the books. And while short interest rose some in recent reporting periods, it still accounts for just 1.6% of the equity's total float.

Roku Inc (NASDAQ:ROKU) stock is flexing its technical muscle today, up 1% at $88.93, fresh off a record high of $89.79, even as the broader equities market sells off. This upside comes courtesy of a price-target hike to $110 from $92 at D.A. Davidson -- a 25% premium to last night's close -- which said the streaming name's addition of Activation Insights could "serve as a catalyst" for ad sales.

Most analysts are already bullish on Roku, with nine of 16 maintaining a "buy" or better rating." However, the average 12-month price target of $79.24 is a nearly 11% discount to current trading levels, meaning more price-target hikes could be on the horizon for a stock that's nearly tripled on a year-to-date basis.

Elsewhere on Wall Street, skepticism has been ramping up, with short interest surging 24.1% in the April 15-May 1 reporting period. Not only does the 9.43 million shares sold short account for 11.6% of the security's available float, but Roku's ability to rally 12.5% over this same time period speaks to its underlying strength.

Options traders, meanwhile, have targeted ROKU puts at an accelerated clip. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 10-day put/call volume ratio of 0.68 ranks in the 70th annual percentile. So while calls have outnumbered puts on an absolute basis, the elevated ratio indicates the rate of put buying relative to call buying has been quicker than usual.

In today's trading, nearly 42,000 calls and 30,000 puts have crossed so far, 1.2 times the expected intraday amount. The weekly 5/24 90-strike call is most active, with 5,600 contracts on the tape, and new positions being initiated. Those buying the calls expect ROKU stock to break out above $90 by tomorrow's close, while those selling the calls think $90 will serve as a short-term ceiling.