The Santa Rally Begins
A Technical Overview
The “Santa Claus Rally” was coined in 1972 by Yale Hirsch, founder of the Stock Trader’s Almanac. This rally takes place during the final five trading days of the year and the first two trading days of the following year. His research has shown that these 7 days have historically shown higher stock prices 79.2% of the time, reflected in the S&P500.1 This year has the added seasonal effect from the pre-election presidential cycle, which is the most bullish year out of the U.S. presidential four-year cycle.
So what’s on my Christmas wish list? Here’s are 3 stocks that are on the verge of a massive breakout that I am watching.
Tesla (TSLA)
When you look across the fintwit universe, most traders are focused on this major resistance line that started back in 2022. Each time the stock has reached this resistance trendline, it has been soundly rejected.
I am, however, more focused on a deeper pattern that seems to be repeating from a structure further back in 2013. The orange fractal is taken from 2015 (when the previous Federal Reserve rate hike campaign began) and extends to mid-2017. Look how closely we have been tracking this structure so far. Currently, the stock is up against the major resistance line from the chart above so I’m asking Santa to launch this. If not, the stock may revisit the $207 supporting trendline as the fractal seems to suggest before the big rally.