As we approach the last week of 2025, historical seasonal patterns in the stock market take center stage. Many stocks exhibit recurring strength around the turn of the year – a phenomenon savvy traders often capitalize on. This report highlights five top seasonal trade setups poised for potential gains as we enter 2026. Each of these stocks has a high historical win rate (≥~80% of the time positive) over the past 20+ years and a strong profit factor (total gains vs. losses), indicating attractive risk-reward. Entries are timed for the market open on the Week of Monday, Dec 29, 2025, with exits in late January to mid-March 2026 per historical precedent. We’ll explore why these patterns might exist – from year-end investor behavior to sector-specific drivers – and overlay any technical signals that could boost confidence. The goal is to arm self-directed retail traders with a clear, narrative-backed game plan for the coming weeks and months. Let’s first set the broader seasonal backdrop before diving into each pick.
Santa Claus Rally success rate (1950–2024): Stocks have ended the year higher ~78% of the time during the final 5 trading days of December and first 2 of January.
Going into year-end, the market historically enjoys the “Santa Claus Rally” – a span covering roughly the last five trading days of December and the first two of January. Since 1950, this 7-day holiday period has produced positive returns about 78% of the time (averaging +1.3%). Several factors may fuel this consistent year-end strength: fund managers engage in window dressing (buying winners to beautify portfolios), investors deploy year-end bonuses, and general holiday optimism and tax-loss harvesting abate selling pressure. In short, fresh money and a bullish bias often buoy stocks during the holidays.
Right on Santa’s heels comes the “January Effect.” This refers to the tendency for small-cap and beaten-down stocks to outperform in January. Historically, smaller stocks jump ~3.8% in January on average, versus ~1.2% for large-caps. The effect is commonly attributed to investors dumping underperformers in December for tax purposes, then re-buying in January – causing a rebound in those names. For our seasonal picks, this context is important: some selections may benefit from broad risk-on flows in tech (thanks to the Santa rally) or from money rotating into neglected/value names (the January effect).
Overall, the seasonal backdrop into early 2026 is one of improving bullish sentiment. It’s a time when many traders have a “clean slate,” new budgets are in play, and optimism about the coming year runs high. (Notably, many corporations announce their capital spending plans at the start of the fiscal year – often January – potentially boosting outlooks for suppliers and investment-heavy sectors.) With this in mind, let’s examine five stock setups that have historically thrived in the upcoming weeks, each with a compelling narrative and clear timing for entry/exit.
- Seasonal Stats: Login to SuperSeasonals.com for all the in-depth statistics and analysis.
- Pattern Drivers: Applied Materials, a leading semiconductor equipment maker, consistently rallies as the new year begins. One reason could be the corporate capex cycle: many chip manufacturers kick off new capital expenditure budgets in January, spurring orders for chip-making gear. Indeed, it’s common for companies to announce fresh capex plans at the start of the fiscal year, which can translate into bullish expectations for suppliers like AMAT. This period also aligns with the tech-centric “Santa rally” – optimism around innovation and product launches (e.g. at CES- Computer Electronics Show- in early January) often lifts the semiconductor sector. Investors anticipate that tech firms will invest in new capacity and technology after budgets reset on Jan 1.
- Technical Overlay: AMAT’s chart heading into late December often shows a bullish bias. Currently around $259 at the time of this writing, the stock has been breaking out to multi-month highs. Traders may note that momentum indicators are strong, and AMAT is trading above key moving averages (in 2025 it repeatedly bounced off support near $200 and pushed higher). The strength into year-end suggests accumulation, consistent with institutional window dressing in tech. A modest pullback or consolidation around the holidays often gives way to an early-January surge once volume returns.
- Why It Appeals to Retail Traders: The setup for AMAT is straightforward and fundamentally backed – buy the week after Christmas, sell by Presidents’ Day. The narrative of “New Year, new tech spending” is easy to grasp, and the seasonal window with a high 83% win rate lends confidence. Retail traders appreciate that AMAT is a large, well-known company (market leader in chip equipment), meaning ample liquidity and news flow. The timing aligns with a broader tech optimism wave, and the clear entry/exit dates simplify the trade plan. In essence, AMAT offers a mix of strong stats and a story (increased chip demand, budget flush) that makes the trade feel grounded in real-world catalysts.
- Seasonal Stats: Login to SuperSeasonals.com for all the in-depth statistics and analysis.
- Pattern Drivers: January has been Netflix’s strongest month of the year – over the last 20 years, NFLX gained over 11% on average between mid-January and early February. Several factors likely underlie this seasonal strength. First, winter is prime time for streaming engagement: consumers hunker down in January with new devices (many received during holidays) and sample fresh content releases. Netflix typically rolls out anticipated shows and films in Q1, stimulating subscriber growth and re-engaging lapsed users. Additionally, Netflix’s Q4 earnings release in late January often serves as a catalyst – positive surprises in subscriber additions or guidance have historically sparked rallies. (For example, NFLX’s Q4 report due Jan 23, 2024 was cited as a potential catalyst for gains, though traders should be aware earnings can introduce volatility in either direction.) The key point is that sentiment on NFLX tends to flip bullish as the new year starts, with investors betting on a “post-holiday subscriber bump” narrative.
- Technical Overlay: Coming into this seasonal window, NFLX may be technically oversold from any year-end tax-loss selling. In fact, at $93.70 at the time of this writing, the stock is at a relatively low price not seen in years (possibly reflecting a prior slump). This means there could be ample upside if a reversal kicks in. Traders might look for a trendline breakout or moving average crossover in early January to confirm the turn. Historically, once NFLX begins its January climb, it often maintains positive momentum for several weeks. For example, in mid-January 2024 NFLX began a sharp rally of ~11% into February. Keep an eye on volume – rising volume in early January on up-days would signal institutional support for the move.
- Why It Appeals to Retail Traders: Netflix is a household name with a story everyone understands – people binge-watch more in winter, and the company’s subscriber numbers jump. This intuitive narrative, combined with a clearly defined entry (right after Christmas) and exit (ahead of Spring), makes the trade easy to follow. Retail traders also tend to gravitate to NFLX’s media buzz (new show releases, etc.) which can reinforce confidence in holding through the seasonal period. Finally, the stock’s historical performance speaks for itself: a high win rate and the knowledge that “January is usually good for Netflix” provides a psychological tailwind. In short, NFLX’s seasonal setup is simple, time-bound, and supported by both data and common-sense reasoning – an attractive recipe for the self-directed trader.
- Seasonal Stats: Login to SuperSeasonals.com for all the in-depth statistics and analysis.
- Pattern Drivers: As the world’s largest contract chipmaker, TSM often benefits from a New Year tech rally. January is typically rife with tech events and bullish news in semiconductors. For instance, the annual CES technology conference in early January can spark investor excitement in chip stocks. In 2025, just ahead of CES, TSM jumped 5.5% in a single session (along with peers like AMD and NVDA) amid a broader semiconductor rally fueled by optimism in AI and new gadgets. This exemplifies how investor sentiment toward chips turns upbeat at the start of the year – themes like artificial intelligence, 5G, and new smartphone launches often dominate headlines, leading traders to pile into names like TSM. Additionally, institutional investors may rotate into cyclical sectors like semiconductors in Q1, expecting stronger demand after the lull of the holidays. TSM’s own fundamentals can play a role as well: the company usually reports its Q4 earnings in mid-January and provides forward guidance. If that guidance is positive (or even if rumors swirl of robust chip orders from big customers), the stock tends to get bid up in anticipation. In short, TSM’s seasonal strength likely stems from a confluence of investor optimism in tech, product cycle kickoffs, and fund flows into semis as a new year begins.
- Technical Overlay: TSM’s technical picture into late December has been constructive. The stock has been making higher lows through Q4, and its longer-term trend is positive. In fact, TSM entered Q1 2025 with strong momentum – a broad “golden cross” was in place with the 50-day MA above the 200-day, signaling an established uptrend. It’s currently trading near $293, not far from its 52-week highs. Traders should watch for resistance around the psychological $300 level; a breakout above that in early January could accelerate the rally. Also, TSM often finds support quickly on any dips during this seasonal period – the limited historical drawdowns contribute to that outsized profit factor. As a confirmation, one might track the Philadelphia Semiconductor Index (SOX); continued strength there would validate sector-wide tailwinds supporting TSM.
- Why It Appeals to Retail Traders: TSM’s seasonal setup offers both a compelling story and impressive stats. Retail traders are drawn to the idea of participating in the “new tech cycle” – essentially buying into the chip sector as it kicks off another year of innovation. The fact that TSM is a cornerstone of global tech (supplying chips for everything from iPhones to cars) makes the narrative tangible. It also helps that TSM trades in the U.S. as an ADR with plenty of liquidity, so it’s accessible. The clarity of the trade – buy right after Christmas, hold ~5 weeks – aligns nicely with the buzz of early-year tech news (product unveilings, earnings, etc.), which keeps traders engaged. Finally, knowing that historically this trade has rarely failed (82% win rate) and produced much larger gains than losses gives retail participants confidence to stick with it. In essence, TSM’s seasonal trade is backed by both data and the evergreen excitement surrounding new tech at the start of the year.
- Seasonal Stats: Login to SuperSeasonals.com for all the in-depth statistics and analysis.
- Pattern Drivers: As a major oil refiner, Valero’s seasonal strength heading into the new year may be driven by a combination of industry dynamics and institutional behaviors. One fundamental factor is the typical winter refining cycle: refineries often undergo maintenance and run at lower capacity in the fall, which can tighten fuel supply by winter. By late December and into January, production ramps up and margins tend to stabilize or improve as demand for gasoline and diesel starts picking up again (think of trucking, heating needs, and eventually Spring driving season prep). In Valero’s case, there’s an added narrative this year – competitor refinery closures are reducing overall capacity, effectively benefiting Valero. For example, Phillips 66 is closing a major Los Angeles refinery and LyondellBasell exited a Houston refining operation, removing a significant amount of fuel output from the market. These exits are a “win” for Valero, allowing it to capture more market share and enjoy fatter profit margins on its output. Indeed, by late 2025 Valero was already reporting refining profits of $13.14 per barrel, up sharply from $9.09 the year prior, reflecting an extremely favorable margin environment. This backdrop – tighter supply and strong refining economics – sets the stage for bullish expectations as 2026 begins. Additionally, the options market seems to be underestimating coming volatility in energy, with implied volatility for VLO relatively low despite smart money hedging activity. This kind of setup often precedes a “coiled spring” breakout to the upside as reality catches up to pricing. In summary, Valero’s seasonal pattern likely stems from a mix of improving fundamentals (rising margins, supply cuts) and the typical rotation into energy names that sometimes occurs if oil prices firm up after the winter holidays.
- Technical Overlay: VLO’s technicals support the bullish case. As of late December 2025, Valero’s chart flashed a golden cross in September – the 50-day moving average has been above the 200-day for months. The stock did dip briefly below its 50-day in early December, but notably found support around the $155 area (near the 200-day MA) and bounced strongly by Dec 18. This successful test of support indicates that the uptrend is intact and buyers are defending key levels. In fact, a proprietary quant model recently flagged a high-confidence “pivot” signal around $174 for VLO, with historical analogues yielding positive moves within ~10 weeks 91% of the time. Technically, this suggests an upside target into the mid-$170s during our trade’s timeframe. Traders should watch the $170-$175 zone as a potential resistance from recent highs above; a break through on strong volume could trigger the next leg higher. Given low implied volatility, there is also an argument for options strategies to play this move, but straightforward stock buyers can simply ride the trend. With refining margin forecasts for 2026 remaining bullish, the technical and fundamental pictures are aligned.
- Why It Appeals to Retail Traders: Valero’s setup is attractive to retail players for multiple reasons. First, the story is easy to understand – less supply (competitor shutdowns) plus steady demand equals higher margins for Valero. It’s essentially a supply-demand narrative in energy, a sector many traders like to follow. Second, VLO is a well-known company (a Fortune 500 refiner) yet its stock isn’t as pricey as some tech names, making it accessible (around $160-ish/share at the time of this writing). The trade duration (approximately 6-7 weeks) is short enough to hold attention, and it aligns with the idea that one can capitalize on winter energy trends without holding through the uncertain spring. The high historical win rate (~81%) and strong past gains give confidence that this isn’t a random play – there’s a demonstrated seasonal edge. Retail traders also appreciate that VLO has healthy liquidity and option availability, providing flexibility in how to execute the trade. Finally, for those who like a bit of income, Valero pays dividends, which can be an added bonus if collected during the hold. All told, VLO’s seasonal trade offers a nice balance of quantitative edge and qualitative rationale (the “fundamental story”), wrapped in a clear time-bound strategy.
- Seasonal Stats: Login to SuperSeasonals.com for all the in-depth statistics and analysis.
- Pattern Drivers: As a midstream energy company (oil & gas pipeline operator), PAA’s strong January pattern likely ties into both the broad January effect and energy-specific trends. With a sub-$20 stock price and moderate market cap, PAA can be considered a mid/small-cap stock – exactly the category that often sees outsized inflows in January as tax-loss selling pressure fades. The nearly 89% win rate for PAA suggests it has very consistently bounced higher after the New Year, which fits the narrative of “sold in December, rebought in January.” In fact, the January Effect historically shows small caps outperforming due to this rebound dynamic, and PAA seems to exemplify that (its +74% annualized seasonal-window return implies a solid absolute gain during the period, likely mid-single-digit percentages on average for the ~5-week span). On the sector front, PAA’s business of transporting crude oil and natural gas liquids could benefit from seasonal demand upticks. Winter months mean increased heating oil and natural gas usage; while PAA is primarily crude-focused, higher overall energy demand can correlate with more volume through pipelines. Additionally, oil prices often find a seasonal bottom in late Q4 – historically, crude tends to be weak in Nov/Dec, which can set the stage for a rebound in Jan/Feb as production cuts or demand normalize. A rising oil price environment in January can lift the whole energy sector, including pipeline operators. Another aspect is institutional repositioning: income-oriented funds may initiate or add to pipeline/MLP (master limited partnership) holdings at the start of the year to capture attractive yields. PAA, for instance, sports a high dividend (recently around 8%), and such yield plays can see renewed interest once the calendar turns (especially after any year-end selling by funds that didn’t want MLP K-1 tax forms on their books at year-end). In sum, PAA’s seasonal strength likely comes from it being a beaten-down high-yield play that investors rediscover in January, combined with a generally favorable early-year climate for energy stocks.
- Technical Overlay: Given PAA’s smaller price and steadier business model, its stock movements aren’t as volatile as pure exploration companies, but the technicals still matter. By late December, PAA often trades at the lower end of a multi-month range, reflecting Q4 weakness. The $15–$17 zone has in the past served as a base from which the stock rallies into January. Right now at $17.42, PAA is near that range, and any sign of strength (say, a push above $18 with volume) could confirm that the seasonal turn is underway. Traders might use simple indicators like the 50-day moving average – historically, PAA climbing back above this average in early January has signaled the trend shift upward. Additionally, relative strength vs. the energy sector ETF (XLE) could be monitored; PAA outperforming XLE in early January would be a clue that the unique small-cap effect is kicking in. Overall, one shouldn’t expect explosive moves from a pipeline stock, but rather a grinding, low-volatility uptrend during the weeks of interest – which is exactly what a high win rate pattern implies.
- Why It Appeals to Retail Traders: PAA’s seasonal trade is appealing especially to value-oriented traders and those who like tangible stories. The idea of a “January bounce” in a stable, dividend-paying oil pipeline company is attractive for its relative safety and simplicity. At ~$17, the stock is cheap enough per share that even small accounts can buy a decent lot, which has a psychological comfort (many retail traders like owning a few hundred shares of a $17 stock versus, say, a few shares of a $170 stock). The nearly 90% historical seasonal success rate is a huge confidence booster – it’s hard to find patterns that consistent, and it stands out. This reliability, plus the knowledge that “energy pipelines tend to perk up after the holidays” gives a clear narrative to latch onto. It’s also a straightforward trade to manage: there’s a predetermined exit by early February, which avoids holding through too much of the winter (when volatility can pick up around late Feb with earnings or changes in oil outlook). Retail traders who followed this strategy in the past have been rewarded more often than not, which builds trust in the approach. Lastly, PAA often flies under the radar, so when it moves in January, it’s typically due to steady accumulation rather than hype – a pattern that disciplined traders can take advantage of without the noise of meme-stock style frenzy. All in all, PAA offers clarity, a high probability edge, and a fundamentally sensible reason to rally (rebounding demand and rotation into yield assets), making it an ideal pick for our top five list.
Each of the five stocks above presents a compelling seasonal trade for the dawn of 2026. They combine statistical strength (high frequency of success and solid profit factors) with believable catalysts ranging from budget cycles and product launches to sectoral supply-demand shifts. For a retail self-directed trader, these setups offer clarity – defined entry on or around Monday, Dec 29, and predetermined exit dates (Login to SuperSeasonal.com for all the stats) – and simplicity in execution. The narratives behind them (a tech spending boost, a streaming surge, a chip cycle rally, a refinery rebound, and a small-cap energy bounce) make it easier to commit to the trades with conviction, since one can “tell the story” of why the stock should rise, not just rely on blind statistics.
As always, it’s prudent to monitor real-time developments: economic news, earnings dates, or any shock events that could alter the historical pattern. Thus far, the backdrop is cooperative – year-end optimism is in the air and no major red flags are visible for these specific names.
In summary, this seasonality report has identified five high-probability trade opportunities to kick off your new year trading. Each idea is backed by both historical data and a fundamental/technical rationale, which is the ideal combination for a retail strategy – it appeals to the analytical side and the common-sense side. If these patterns hold true in 2026 as they largely have in the past, subscribers who choose to participate could start the year on a strong note. Here’s to a successful trading week and a prosperous New Year!
Good luck and trade safely.
Chad Shirley
