Sometimes an industry group looks good technically, sometimes fundamentally, and then other times seasonally. But what happens when they all line up simultaneously? Well, we’re about to find out with the travel & tourism group ($DJUSTT). On Friday, Expedia (EXPE, +17.27%) soared after reporting blowout quarterly results after the bell on Thursday. Revenues easily surpassed consensus estimates, $3.18 billion vs. $3.08 billion and EPS did the same, $2.39 vs. $2.07. Here’s how EXPE looked on its chart after Friday’s surge:
EXPE now has excellent support in the 191-195 zone, in my opinion. 191 was the price resistance prior to Friday’s gap higher and 195 (actually 194.72) was the gap opening on Friday on over 8 million shares, its 3rd largest volume day of the past year. Booking Holdings (BKNG) is set up to potentially do the same – report blowout numbers and soar to all-time highs – when it reports its quarterly results on Thursday, February 20, 2025.
The DJUSTT had been consolidating after an earlier run higher in 2024. This now looks like an uptrend, followed by a potential cup pattern:
In the bottom panel, watch the relative strength line for the DJUSTT vs. the benchmark S&P 500. A breakout here to a multi-month high would bode well for the group.
I certainly don’t want to leave out seasonality. Travel & tourism THRIVES beginning in February and running through . Check this out:
The next 3 months – February through April – averages gaining 10.6% per year for the past two decades! These 3 months also rank the highest for the DJUSTT, in terms of the odds of these months ending higher than they began. February and March have both moved higher roughly 75% of the years since 2005.
This is the TRIFECTA – fundamentals strengthening, technicals lining up, and seasonal tailwinds.
But What About The S&P 500?
Well, that’s another story. Obviously, the DJUSTT would likely do better in a strong overall market environment and we just received another clue on the S&P 500 via the “January Effect”. There’s an old adage on Wall Street that says, “So goes January, so goes the year.” There’s a lot of truth to this statement and it generally depends on how the S&P 500’s January performance ranks vs. all the Januarys past. Exactly where did January 2025 rank and what does it tell us about the balance of 2025?
That’s the subject of our “January Effect” members-only webinar on Monday, February 10th. If you’d like to be part of this webinar, simply CLICK HERE to learn more about the event and take advantage of our FREE 30-day trial!
Happy trading!
Tom