In the past week, the PowerShares QQQ (NasdaqGS: QQQ) is up nearly 4% and the ETF closed just pennies below $90 on Thursday. When QQQ, the fourth-largest U.S. ETF by assets, breaks through $90, it will be the first time since late 2000 it has done so.
With March right around the corner, investors may want to give QQQ because the odds favor a decent performance by the ETF in the third month of the year. In the past 15 Marches, QQQ has risen 11 times, good for a 73% rate of success, according to PastStat.com.
QQQ being a strong idea for March comes on the heels of the end of another seasonally strong period for the ETF. QQQ’s “average return per period during the past 28 ‘sweet spot’ periods was 4.8 per cent. The trade was profitable 85 per cent of the time and outperformed the S&P 500 index 79 per cent of the time,” report Don and Jon Vialoux for the Globe and Mail.
The pair cite data courtesy of EquityClock.com and note that the true seasonal sweet spot for QQQ is Dec. 20 through Jan. 19.
Importantly QQQ was up 2.7% year-to-date heading into Friday despite January through February often being a seasonal weak spot for Internet stocks. Google (NasdaqGM: GOOG), Facebook (NasdaqGM: FB) and eBay (NasdaqGM: EBAY) combine for about 13% of QQQ’s weight. [QQQ Heads Toward Seasonal Sweet Spot]
While the odds favor QQQ posting a gain in March, it is not the ETF’s best month a return basis. Average return in March over the past years is 1.41%, but the fund delivers, on average, superior returns in October, April and November, according to PastStat.