At first glance, buying a stock slated for addition to the S&P 500 index seems like an ideal trade. Dozens of mutual funds and exchange-traded funds (ETFs) try to mimic the index by holding its basket of 500 stocks, so if Standard and Poor’s replaces one stock with another, these funds must follow suit. Billions of dollars will flow into the new stock. It should be a lay-up long trade. Researchers and academics have tackled this issue and have identified bullish patterns, which is no surprise. However, their studies lack details about the stocks’ specific intraday moves surrounding these events, which is a key part of identifying the best times to enter and exit the market.

The following analysis looks at how individual stocks behaved when they were added to the S&P 500 index over the last seven years. Fortunately, there are solid patterns you can trade in the wake of the initial spike move — including some opportunities you might not expect.