One airline stock could catch seasonal tailwinds
It's been a rough August for U.S. stocks, with the S&P 500 Index (SPX) set to close the month with a loss of more than 2%. However, ahead of the long holiday weekend -- which presents trading opportunities of its own -- we decided to hunt for stocks that could shine in September, if history is any indicator. Among the equities that tend to perform well is Southwest Airlines Co (NYSE:LUV).
Below are the 25 best stocks to own in September, looking back 10 years, courtesy of Schaeffer's Senior Quantitative Analyst Rocky White. LUV shares have ended the month higher 80% of the time, averaging a healthy one-month gain of 6.45% -- among the best on the list.
Since bouncing off familiar support in the $47.50-$48.50 area earlier this month, Southwest Airlines stock has rebounded roughly 8.6%. What's more, the equity is set to close atop its 200-day moving average for the first time since late July, last seen 1.9% higher at $52.12. Another 6.45% jump from current levels would put LUV around $55.48 heading into October -- near the security's July 25 post-earnings high.
LUV shares could also find some help from the options crowd. The equity's Schaeffer's put/call open interest ratio (SOIR) of 1.34 indicates that near-term put open interest exceeds call open interest. Further, this ratio sits higher than two-thirds of all other readings from the past year, suggesting short-term traders are more put-heavy than usual right now. Should LUV continue its trend of positive Septembers, an unwinding of pessimism among options traders could keep the wind at the stock's back.