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Here Are Five Solid Small Cap Trades And A Powerful ChartList For 2018
By: Tom Bowley | December 1, 2017

Happy holidays! I want to wish everyone a joyous holiday season and here's to a happy, healthy and prosperous 2018! Thank you so much for all your support of StockCharts.com in 2017!

To better understand the reasoning for the stocks selected below, you first need to understand that the December 16th through December 31st period has been unbelievably bullish for the small cap Russell 2000 since its inception in 1987. Here are the Russell 2000's annualized returns for each calendar day from December 16th through December 31st over the past three decades:

December 16: +172.84%
December 17: +45.24%
December 18: +35.68%
December 19: -33.51% (only down day in the second half of December)
December 20: +79.54%
December 21: +155.98%
December 22: +76.35%
December 23: +103.86%
December 24: +47.67%
December 26: +125.49%
December 27: +26.27%
December 28: +17.31%
December 29: +77.28%
December 30: +87.88%
December 31: +104.23%

December is the best month of the year for small cap stocks. But the second half of December is where the money's been made in the past. The breakdown of Russell 2000 annualized performance between the first and second halves of December is astonishing:

December 1-15: -3.27%
December 16-31: +74.88%

Talk about a Santa Claus rally!

So what do you get if we combine this small cap historical knowledge with my trading strategy of buying only companies that beat Wall Street estimates for quarterly revenues and EPS? Well, here are several of the small cap stocks on my Strong Earnings ChartList:

1. Green Dot Corp (GDOT) - $2.99 billion consumer finance company:



2. Insulet Corp. (PODD) - $3.98 billion medical equipment company:



3. Generac Holdings Inc. (GNRC) - $3.04 billion building materials company:



4. Avid Technology Inc. (AVID) - $0.25 billion broadcasting company:



5. Granite Construction (GVA) - $2.49 billion heavy construction company:



All of the above stocks came from my Strong Earnings ChartList that I keep at StockCharts.com. The use of ChartLists is a great way to organize potential trading candidates. You can easily add charts, annotate and save them, and then scan for certain criteria. And now, the best news of all!


Finally, since this is my last ChartWatchers article of 2017......

Happy trading, happy holidays and Happy New Year!

Tom

http://stockcharts.com/articles/chartwatchers/2017/12/here-are-five-solid-small-cap-trades-and-a-powerful-chartlist-for-2018.html

• DiscoverGold
(Disclosure: I do not have position in any of the above mentioned securities)

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