A pair of real estate stocks are at the top of the list
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.
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.