We’re in the midst of the toughest month for the market, and that makes finding stocks to buy a bit tricky. Since 1928, the S&P 500 has lost an average of 1% over the course of September, making it by far the the worst month for stocks.
With the tide going against them, finding stocks to buy can be pretty difficult — especially if we’re looking for stocks to buy that put up positive gains, not just outperform a money-losing market with slightly smaller declines.
In searching for stocks to buy for September, technical analysis is your friend. Target stocks should be sending positive technical signals such as accelerating price momentum to the upside, as well as strong seasonality. No, there’s no such thing as slam-dunk stocks, but having the charts on your side sure improves the odds.
With that, we searched the S&P 500 for stocks to buy for September by looking for names flashing signals of technical strength. Upward price momentum and a track record of outstanding seasonal returns helped make the case for everything from pharmaceuticals to apparel retailers.
Here are five stocks to buy for this month:
Stocks to Buy – Avago Technologies (AVGO)
Click to Enlarge Avago Technologies’ (AVGO) chart is a thing of beauty if you like relentless and hefty gains. Not only does it keep setting new 52-week highs, but it uses support at its 50-day moving average as a springboard to more upside ahead.
Price momentum keeps chugging away, too. AVGO shares are currently trading 15.3% above their 50-day MA and 33.6% above their 200-day. True, the relative strength index of 96 shows AVGO to be overbought — but overbought conditions can persist for a long time. Besides, any selloff will be short and shallow down to the 50-day MA.
And historically, AVGO loves September, putting up a average monthly gain of 2.5% over the last decade, according to data from Thomson Reuters Stock Reports.
Stocks to Buy – F5 Networks (FFIV)
Click to Enlarge Like AVGO, F5 Networks (FFIV) has a chart that portends more gains. The upside has been relentless, and you can count on that 50-day moving average for springy support.
Yes, the RSI of 86 suggests FFIV is overbought, but again, that’s a condition that can last for a long time — and that 50-day MA has been a solid floor.
As we said, the upside has been relentless. Notching new 52-week highs, FFIV shares currently are trading 9.7% above their 50-day MA, and 18.8% above their 200-day moving average of $105.84.
Perhaps most important, FFIV loves this time of year. Shares gain an average of 3.7% in September and 12.3% in October.
Stocks to Buy – Monster Beverage (MNST)
Click to Enlarge Monster Beverage (MNST) stock crossed its 50- and 200-day moving averages to the upside a few weeks ago and hasn’t looked back. Although that has put the RSI of 76 into overbought territory, price momentum suggests more gains to come this month.
MNST shares currently are trading 22.4% above their 50-day MA and 29% above their 200-day. MNST also is closing in on its 52-week high.
Seasonality is at the stock’s back, too. Over the last 10 years, MNST gained 3.3% over the course of September. Just for good measure, it added another 2.1% in October.
Stocks to Buy – TJX Cos. (TJX)
Click to Enlarge TJX Cos. (TJX) recently crossed above its 50-day and 200-day moving averages, and this time the momentum suggests the stock can stay there.
Heck, TJX hasn’t traded above both averages simultaneously since April. But now it looks like it can stick.
TJX is about 6% below its 52-week high and narrowing the gap. Meanwhile, TJX shares currently are trading 10.5% above their 50-day MA and 3.5% above the 200-day. The RSI of 77 is clearly in overbought territory, but after the latest breakout, that shouldn’t cause anything more than a slight pause in the uptrend.
TJX also is a steady seasonal performer, gaining an average of 1.5% in September and 1.4% in October.
Stocks to Buy – Regeneron Pharmaceuticals (REGN)
Click to Enlarge Regeneron Pharmaceuticals (REGN) is on the cusp of being overbought at an RSI reading of 70, but momentum and seasonality should keep it chugging along through September.
REGN is setting new 52-week highs and is trading well above its moving averages. Indeed, REGN shares currently sit 11.4% above their 50-day MA and 18% above the 200-day. Except for a brief dip below its 200-day MA in June, REGN finds support at that level.
Seasonality is very much in favor of REGN heading into September, as well. Over the last decade, REGN has gained an average of 6.4%, according to data from Thomson Reuters Stock Reports.
As of this writing, Dan Burrows did not hold a position in any of the aforementioned securities.
