HomeFinanceHow I Used Barchart’s Stock Tools to Test a 70-Year-Old Wall Street...
How I Used Barchart’s Stock Tools to Test a 70-Year-Old Wall Street Slogan
If you simply Google “sell rosh” like I did, you will likely see it fill in the rest of an investment market saying that dates back to 1955. “Sell Rosh Hashanah, Buy Yom Kippur.” For those not familiar with the story and a couple of nouns I just used, here’s a quick primer.
Back on Sept. 23, 1955, then-U.S. President Dwight Eisenhower, a hero of World War II, suffered a massive heart attack. The market sold off, concerned for the health of the 65-year-old leader. He recovered, and even won election to a second term in 1956. But back then, heart care was not what it is today, and thus alerted the rest of the world to the benefits of early diagnosis.
However, the stock market was naturally shocked by this, and the Dow Jones Industrial Average ($DOWI) fell 6.5% the next trading day, Sept. 26. It also occurred on the holiest day of the Hebrew calendar, Yom Kippur, a day of self-reflection and fasting.
Wall Street slogans and its habitual ability to laugh at itself somehow led to a theory that, to this day, is part of the investing culture. The saying “sell Rosh Hashanah, buy Yom Kippur” refers to the seasonal tendency for stocks to sell off at the start of the Jewish New Year, and start to recover as Eisenhower did, just after Yom Kippur.
While there is some evidence to support that trading strategy, which has worked so far this year, it could just be correlation without causation. Or, one of the many self-fulfilling prophecies that this industry tends to make a habit out of. Seen any “October stock market warning” articles lately? “Santa Claus rally,” anyone?
None of that history will make us money. What might? Scouting for good stocks, those with technical setups. And in the spirit of the Jewish high holiday season, I used Barchart’s quick and easy stock analysis tools with the following goal: Find the list of stocks of companies based in Israel, a global technology leader despite its small size, and run charts on them to see if any look particularly timely. The result: a watchlist of stocks that might just coincidentally rally into and after Yom Kippur.
That’s a Yiddish expression loosely defined as idle chatter. In other words, let’s get right to it. Given that there are more Israel-headquartered stocks listed on U.S. stock exchanges than nearly any other country, I started my search by pulling up the constituents page for the iShares MSCI Israel ETF (EIS). This 17-year-old fund has more than $360 million in assets, and is one of dozens of single-country ETFs I track.
As is the case with such ETFs which are focused on smaller nations, there are several holdings that are not core U.S. listings. So I exported the full holdings, then took that cleaner list and loaded it back into Barchart as a watchlist. Super quick and easy to do, even for a tech-challenged type like me (you can learn how to screen stocks using watchlists here).
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And while that produced a decent list of a few dozen stocks, just for good measure, I combined that watchlist with another longer-tenured Israel fund, the 12-year-old Van Eck Israel ETF (ISRA). That brought the watchlist to more than 50 U.S.-traded stocks.
Now technically, those who observe Yom Kippur next week will not be trading during that day, even though the stock market is open in the U.S., where these stocks trade. But this is more about finding good setups in the charts, as opposed to making decisions based on the Hebrew calendar, Eisenhower’s heart problems, the lunar cycle, or any other non-technical analysis.
Frankly, I didn’t find many, at least not among the $2 billion market cap and up segment of the list. This is an emerging market, after all. And one heavily dependent on tech stocks, many of which have already appreciated significantly.
So while my daily chart analysis of these Israel-based stocks did not produce much in the way of “aha” moments, when I added some weekly chart work to the project, I found a few to offer up here. These at least appear to be considerations as candidates to make up some lost ground, as their year-to-date returns have been negative or at least less than double-digits. And yes, all are tech-related.
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Check Point Software (CHKP), one of many digital security firms which were spawned from its home country’s decades of innovation, first through the military, and now in many aspects of the commercial world.
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And here’s Wix.com (WIX), another stock coming off a steep drop. If you’ve ever built a website, or know someone who has, you may be familiar with their products.
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Finally, Cellebrite Di Ltd (CLBT) is the least well-known of the three, but it has the best-looking chart by far. That could be a result of its leadership in the emerging field of digital investigations, with applications to criminal cases as well as internal investigations.
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The tradition of “sell Rosh Hashanah, buy Yom Kippur” still has a following on Wall Street. But in this era of instant information, it is vulnerable to being less relevant, since the stock market is a discounting mechanism.
The ability to process information in nanoseconds that used to take hours or days is both ironically part of the Israel stock success story of the past, and one potential reason that 70-year-old expression could have more mixed results going forward.
As it turns out, the Hebrew word “Shalom,” which can be meant as “hello” or “goodbye,” applies in either case.
On the date of publication, Rob Isbitts did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com
