Executive Edge

How to trade April: Think Apple and blue chips

How to trade April: Think Apple and blue chips
How to trade April: Think Apple and blue chips

Spring came early to the markets, and if history is any guide, the rally could continue into April.

After a dismal start to the year, the has rebounded nearly 5 percent this month.

We used Kensho, a tool designed to quantify historical market events, to look for clues about the market's performance in April over the last decade.

A few patterns emerge: Apple and blue chip stocks reliably outperform while small caps and the U.S. dollar tend to lag.

One-hundred-gram gold bars sit on a one-kilogram gold bar, center, at Gold Investments Ltd. bullion dealers in London, July 15, 2014.
Decoding gold's signal to stocks

Over the last decade, April has generally been a good month to be long equities. The S&P 500 has traded positive eight of the last 10 years that month, while the Dow Jones industrial average has climbed in every single occasion.

The best individual spring stocks have been market giants such as Apple. It's traded positive in April nine of the last 10 years, and returned nearly 8 percent on average. Intel, Caterpillar and American Express have also been reliable bets.

Goldman Sachs, United Health and Pfizer are the only Dow components that have posted negative average returns in April since 2006.

While April's been good to market giants, it hasn't been as kind to the smaller guys.

The small cap Russell 2000 index has underperformed, finishing the month with losses half the time.

How to trade the euro-dollar divergence

The dollar index typically takes a wash in April showers as well. It's traded negative eight of the last 10 years, and lost 1.5 percent on average.

As always, past performance is no guarantee of future results, but these are some of the trades that have worked out for investors over the last 10 years. And with April on the way, you may want to consider a little spring cleaning for your portfolio.

Disclosure: NBC Universal, the parent company of CNBC, is a minority investor in Kensho.