One of the studies on US stock market anomalies has found the effectiveness of the time-of-day effect in trading US stocks and has shown that they rise in the first 45 minutes of trading from Monday to Thursday, as well as in the final 2 hours of the trading session on Mondays and Fridays.
At the same time, Apple, Intel and Home Depot have shown the best results in the first 45 minutes of trading on Monday, Visa and Apple on Tuesday, IBM and Procter & Gamble on Wednesday, American Express and Home Depot on Thursday.
And the leaders in the completion of trading have become UnitedHealth on Mondays and American Express on Fridays.
All of the above companies have successfully reported results for the third quarter of fiscal year 2022. Revenues of all companies exceeded expectations, earnings per share also turned out to be higher than expected. The exceptions are Intel and Procter & Gamble. Their reporting failed to meet analysts' expectations.
Usually good quarterly reports of companies inspire investors, so that in the absence of shocks, their upside potential remains at least until the next report.
Based on this, short-term purchases during the current week can be planned.
Trading plan:
1. Buying Apple and/or Home Depot shares at the opening on Monday.
2. Buying Visa and/or Apple shares at the opening on Tuesday.
3. Buying IBM shares at the opening on Wednesday.
4. Buying American Express and/or Home Depot shares at the opening on Thursday.
According to this plan, positions should be closed 45 minutes after the opening of the trading session.
To protect funds, a Stop Loss order should be set below the low of the previous trading day.
If the session opens with a gap, and the Open of the day is below the low of the previous day, it is better to refrain from entering the market.
5. Buying UnitedHealth shares 1.5 - 2 hours before the close of trading on Monday.
6. Buying American Express shares 1.5 - 2 hours before the close of trading on Friday.
Closing a position according to this plan at the end of the trading session of the current day.
A protective Stop Loss order is below the low of the previous day.
And if the session opens with a gap, and the Open of the day is below the low of the previous day, it is better to refrain from entering the market.
Remember the spread and money management rules!
Risk Warning!
Trading in financial markets involves a high level of risk and may result in the loss of investment capital. The MarketCheese team is not responsible for the possible loss of your investment funds.
This content is for informational purposes only and is not intended to be investing advice.
