Colgate-Palmolive (NYSE: CL) is a well-established consumer goods company known for its strong presence in the oral care, personal care, and household products markets. With a stable business model and a history of consistent dividend payments, CL is often considered a defensive stock. However, beyond its long-term stability, an interesting seasonal anomaly has emerged in its stock price performance.
A March Trading Anomaly
Over the past 20 years, Colgate-Palmolive’s stock has shown a remarkably consistent pattern: Between March 15 and April 9, the stock has posted gains every single year. This results in a 100% win rate for this period.
- Mean return: +3.3%
- Median return: +2.5%
While seasonality alone is never a guarantee of future performance, a pattern this strong is worth analyzing.
Colgate-Palmolive (CL) March Seasonality
| Status | Change | Percentage | Start Date | Start Price | End Date | End Price |
|---|---|---|---|---|---|---|
| UP | $0.1900 | 0.2% | 03.15.2024 | $87.46 | 04.09.2024 | $87.65 |
| UP | $3.5900 | 5.0% | 03.15.2023 | $71.55 | 04.10.2023 | $75.14 |
| UP | $5.4500 | 7.3% | 03.15.2022 | $74.80 | 04.08.2022 | $80.25 |
| UP | $3.7400 | 4.9% | 03.15.2021 | $76.04 | 04.09.2021 | $79.78 |
| UP | $7.7500 | 12.5% | 03.16.2020 | $62.16 | 04.09.2020 | $69.91 |
| UP | $1.7500 | 2.6% | 03.15.2019 | $66.36 | 04.09.2019 | $68.11 |
| UP | $1.3900 | 2.0% | 03.15.2018 | $70.03 | 04.09.2018 | $71.42 |
| UP | $0.1400 | 0.2% | 03.15.2017 | $73.59 | 04.10.2017 | $73.73 |
| UP | $3.2400 | 4.8% | 03.15.2016 | $67.83 | 04.08.2016 | $71.07 |
| UP | $1.2600 | 1.8% | 03.16.2015 | $68.70 | 04.09.2015 | $69.96 |
| UP | $2.5900 | 4.1% | 03.14.2014 | $63.14 | 04.09.2014 | $65.73 |
| UP | $2.1550 | 3.8% | 03.15.2013 | $56.47 | 04.09.2013 | $58.63 |
| UP | $1.1000 | 2.3% | 03.15.2012 | $47.42 | 04.09.2012 | $48.52 |
| UP | $1.9950 | 5.2% | 03.15.2011 | $38.65 | 04.08.2011 | $40.64 |
| UP | $0.1450 | 0.3% | 03.15.2010 | $41.99 | 04.09.2010 | $42.14 |
| UP | $0.8300 | 2.9% | 03.16.2009 | $29.07 | 04.09.2009 | $29.90 |
| UP | $0.4700 | 1.2% | 03.14.2008 | $38.85 | 04.09.2008 | $39.32 |
| UP | $0.6650 | 2.0% | 03.15.2007 | $32.69 | 04.09.2007 | $33.36 |
| UP | $0.5750 | 2.0% | 03.15.2006 | $28.33 | 04.10.2006 | $28.90 |
| UP | $0.3550 | 1.3% | 03.15.2005 | $26.42 | 04.08.2005 | $26.77 |
How to Trade This Pattern
Traders looking to capitalize on this seasonal trend have a few potential strategies:
- Wait for a Technical Entry Signal: Rather than blindly entering a position on March 15, traders can look for confirmation signals such as a breakout above a resistance level, increased trading volume, or a bullish candlestick pattern.
- Aggressive Approach – Enter Without Confirmation: More aggressive traders might enter a position around mid-March without waiting for confirmation. However, this increases risk, as there is no guarantee that the historical trend will repeat itself.
- Risk Management: Regardless of the approach, setting a stop-loss level to manage potential downside risk is crucial. Additionally, profit targets could be set based on the historical mean and median returns.
Risk Disclaimer
While historical patterns can be useful, they do not guarantee future performance. Market conditions, macroeconomic factors, and unexpected news events can influence stock prices. Traders should use proper risk management techniques and consider their own risk tolerance before entering a position.
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