Seasonality Charts
What Are Seasonality Charts?
Seasonality is the tendency for securities to perform better during some periods and worse during others. These periods can be days of the week, months of the year, six-month stretches, or even multi-year timeframes. For example, Yale Hirsh of the Stock Traders Almanac discovered the six-month seasonal pattern or cycle. Since 1950, the best six-month period for the S&P 500 extends from November to April. By extension, the worst six-month period runs from May to October, where the phrase “sell in May and go away” comes from. StockCharts offers a seasonality tool that chartists can use to identify monthly seasonal patterns. This article will explain how this tool works and show what chartists should look for when using our Seasonality Charts.
Calculating Seasonality
The seasonality tool calculates two numbers: the percentage of time the month is positive and the average gain/loss for the month. The calculations are pretty straightforward. Looking back over 19 years, there will be 228 months in total and 19 data points for each month. If a symbol advances nine times for one month, the seasonal bar will show 47% (9/19 = 0.47). If a symbol advances 15 times for a particular month, the bar will show 74% (15/19 = 74%).
The example below shows the seasonality tool in histogram format for the gold futures spot price ($GOLD). The number at the top of each bar shows the percentage of times $GOLD closed higher for that month. The number at the bottom of each bar shows the average gain/loss for those 19 or 20 months.
Note the current date when looking at a seasonality chart. If you are looking at a seasonal chart in mid-August (like the example chart above, created in August 2026), the seasonal numbers from January to July will be based on the number of years shown in the slider (i.e., 20). The seasonal numbers for August will also be based on the number of years in the slider, but these numbers are subject to change because August 2026 is still a work in progress. The numbers from September to December will be based on the number of years in the slider less one (i.e. 20 - 1 = 19), because those months have not taken place yet in 2026.
Interpreting Seasonality Charts
Seasonality has to do with what happened in the past. It's a historical tendency. There is no guarantee that past performance will equal future performance, but traders can look for above-average tendencies to complement other signals.
On the face of it, a bullish bias is present when a security gains more than 50% of the time for a particular month. Conversely, a bearish bias is present when a security rises less than 50% of the time. You should look for more extreme readings than 50%, since that would suggest a relatively strong tendency. For example, readings above 65% would show an above-average bullish bias, while readings below 35% would show an above-average bearish bias.
The example below shows Intel (INTC) with a strong bullish bias in March (73%) and November (80%). Also, the average gain is 4.43% in March and 4.90% in November.
On the bearish side, the stock moved higher only 33% of the time in August, which means it moved lower 67% of the time. The average loss in August is 3.97%, and traders would have been rewarded for waiting until September 1 to consider buying. Months that range from 40% to 60%, such as July at 47% or December at 53%, have no strong bias.
Before leaving this example, take a look at April. Intel was up 53% of the time in April, with an average loss of 1.60%. Even though Intel moved higher more often than it moved lower in this month, the losses during the declines outpaced the gains during the advances.
Relative Seasonality
Chartists can also measure relative seasonality by comparing the performance of one security against another. The option to add a "compare" symbol can be found just above the chart.
The example below shows the Russell 2000 ETF (IWM) relative to the S&P 500 ETF (SPY) over the last 20 years, which reflects the performance of small-cap stocks relative to large-cap ones.
Use relative seasonality to find stocks, sectors, or groups that outperform the market during certain months. As the chart above shows, the Russell 2000 shows a strong tendency to outperform the S&P 500 in June (70% of the time). In addition, the Russell 2000 outperforms the S&P 500 by an average of 0.92%. The worst month for relative performance is April, where the Russell 2000 ETF only outperforms the S&P 500 ETF 30% of the time, and typically underperforms by -0.95%.
Seasonality Line Charts
There are three different ways to view seasonality charts—separate scale, same scale, and histogram. The examples above were shown in histogram format, which makes it easy to see aggregate performance for each month.
You can switch between viewing options by clicking the icons in the lower left-hand corner. The example below shows a Separate Scale line chart version for Lowes (LOW) relative to the S&P 500 ($SPX). Each year has a separate line.
First, notice that August is still a work in progress because the red line has yet to reach the end of the month. This is because the chart was created on August 25, and the month was incomplete. Second, notice that there is no scale because we are only concerned with directional movement, i.e., whether the lines moved up or down. Notice how the lines tended to decline in May and rise in August.
The middle icon is to view a seasonality line chart where all the years' lines use the same scale. This means all performance lines begin at zero percent, allowing you to compare monthly or yearly performance.
The chart below shows that 2022 was the best year of the four complete years. The fifth year, 2026, is still a work in progress because this chart was created in August 2026, but so far, it is shaping up to be the worst year of the five, with the largest percentage loss. Note that even the best year of the five, 2022, was not a positive one, finishing up just below the 0% mark. Lowes rarely outperformed the S&P 500 during these five years.
Cool Tip: The year buttons above the chart can be used to hide or show the line for a particular year.
The Bottom Line
Seasonality is a tool that gives chartists a historical perspective on performance tendencies. Even though past performance does not guarantee future performance, chartists can use these seasonal patterns to increase their edge. Chartists can look for bullish setups when the seasonal patterns are strongly bullish and bearish setups when seasonal patterns are strongly bearish. As with all indicators and technical analysis tools, seasonality charts should be used with other analysis techniques.
Accessing the Tool
Chartists can access Seasonality charts from the Charts & Tools menu, the Member Tools area of Your Dashboard, or the More Charting Tools section of the Charts & Tools page. Our Seasonality Charts article in the Support Center describes how to use all the controls.
Cool Tip: Members can use Seasonality View to view the saved charts on their ChartLists as Seasonality charts.
Additional Resources
StockCharts In Focus
The following StockCharts In Focus video, “Find Historical Price Trends with Seasonality Charts,” deep-dives into using seasonality charts on StockCharts.
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