As we approach a long holiday weekend on Wall Street, Schaeffer's Senior Quantitative Analyst Rocky White ran the numbers to find out which S&P 500 Index (SPX) components tend to fare the best -- and worst -- during the post-Presidents Day trading week. Among the names with notable mid-February returns are travel sector cohorts Priceline Group Inc (NASDAQ:PCLN) and United Continental Holdings Inc (NYSE:UAL), with PCLN delivering outsized gains and UAL landing near the lowest rung on the ladder.
Specifically, over the past 10 years, online reservation service PCLN has averaged an impressive gain of 6.43% during the four-day week following Presidents Day -- the biggest average gain of any SPX component over this time frame. What's more, the stock has ended the week higher 80% of the time.
Heading into this seasonally bullish stretch, PCLN is fresh off a successful test of its 80-week moving average, which has provided key support over the past two years. There's also potential options-related support in play, as evidenced by the gamma-weighted Schaeffer's put/call open interest ratio (SOIR) of 1.46 -- which indicates that puts comfortably outnumber calls among near-the-money options set to expire within three months.
At last check, PCLN is up 1.1% at $1,817.28. An "average" rally of 6.43% from here would place the shares north of $1,934 by the end of next week.
On the other hand, UAL has averaged a drop of 4.95% the week of Presidents Day, with seven of the last 10 returns being negative. A decline next week would simply extend the recently bearish price action for UAL -- which gapped sharply lower in late January on the heels of a poorly received earnings report, and is now down 2.2% year-to-date to trade at $65.95.
That post-earnings bear gap smacked UAL below its 20-day moving average, and this short-term trendline just completed a bearish cross with its 200-day counterpart. This technical formation effectively confirms the stock's downward momentum, and creates a formidable hurdle in the overhead $68 region.
Meanwhile, short sellers are piling on. Short interest on UAL rose by 50% over the past two reporting periods, and a continuation of this short-selling activity could translate into continued headwinds for the struggling stock. Based on the equity's current price, an "average" Presidents Day week would place UAL around $62.69 by next Friday.