FREDAlert!
Volume 8, Issue 4
December 16, 2016
Here is the tax bounce list for 2016/2017. We use the traditional rules for this list. These are to own the position in the stocks by the last trading day in December and eliminate the holdings by the last trading day in January of the following year. In this case, that would be December 30, 2016 and January 31, 2017.
The idea behind this traditional trade is that many otherwise good companies are being sold just for tax reasons, and that these will bounce up in the New Year. What is not often mentioned is that this strategy was first popularized in the 1970’s, when there were several difficult years for equities. In good years for the market this tactic is less effective, as many of the stocks making new lows into the end of the year are doing so for good reasons – i.e. they are bad companies, and not because the market has been difficult.
So it is with this year’s list. We have picked several attractive charts that are at or close to lows, while realizing these may be troubled companies that may not bounce. We give buy prices and targets – and the rules are that these should be bought at or below the buy limits, and sold at the target prices. We use no stop losses, with the caveat being some of these could be unmitigated disasters. All of these should be bought today or as soon as they move to or below the buy limit. All should be sold on January 31st, if not sold previously at the target price.
