Get ready to sell Nasdaq stocks, according to Wall Street seasonal theory

It’s almost time to part with the Nasdaq Composite as the tech-heavy index approaches a typically weak period, according to the Stock Trader’s Almanac. The Almanac shows the Nasdaq is strongest from November through the end of June, with the benchmark averaging a 0.8% advance in the final month of that stretch. In pre-election years, June is an even better month for the Nasdaq, averaging a a 2.4% gain. “Over the last 52 years June has shone brighter on NASDAQ stocks as a rule. … This contributes to NASDAQ’s ‘Best Eight Months’ which ends in June,” the Almanac said. However, the Nasdaq’s moving average divergence-convergence (MACD) indicator typically flashes a sell signal between June and sometime in July, meaning investors may want to pare their exposure to the index. From July 1 through Oct. 31, the Nasdaq averages a gain of just 0.2%, the Almanac pointed out. The seasonal weakness overlaps with that of the Dow Jones Industrial Average’s and S & P 500’s, which kicks off May 1 and runs through October. Both indexes average more muted returns during that period, leading to an old Wall Street adage that says, “Sell in May and go away.” The Nasdaq has been on fire this year, rallying more than 9% as investors pile into companies with exposure to artificial intelligence.

Traders work on the floor of the New York Stock Exchange during morning trading, May 17, 2023.

Michael M. Santiago | Getty Images

It’s almost time to part with the Nasdaq Composite as the tech-heavy index approaches a typically weak period, according to the Stock Trader’s Almanac.

The Almanac shows the Nasdaq is strongest from November through the end of June, with the benchmark averaging a 0.8% advance in the final month of that stretch. In pre-election years, June is an even better month for the Nasdaq, averaging a a 2.4% gain.

“Over the last 52 years June has shone brighter on NASDAQ stocks as a rule. … This contributes to NASDAQ’s ‘Best Eight Months’ which ends in June,” the Almanac said.

However, the Nasdaq’s moving average divergence-convergence (MACD) indicator typically flashes a sell signal between June and sometime in July, meaning investors may want to pare their exposure to the index. From July 1 through Oct. 31, the Nasdaq averages a gain of just 0.2%, the Almanac pointed out.

The seasonal weakness overlaps with that of the Dow Jones Industrial Average’s and S&P 500’s, which kicks off May 1 and runs through October. Both indexes average more muted returns during that period, leading to an old Wall Street adage that says, “Sell in May and go away.”

The Nasdaq has been on fire this year, rallying more than 9% as investors pile into companies with exposure to artificial intelligence.