Weekly Trading Update #13 (Mar 25)
The only stocks you need to watch this week, hand-picked by my proprietary algorithm
Dear subscribers,
Welcome back to My Weekly Stock, where we blend in-depth market analysis with proven momentum-based trading strategies. My mission? Help you navigate the financial markets with unbiased, data-driven insights that you can act on.
As we head into a new week, it's time for my Weekly Trading Update! Stay tuned to learn more about how my trading strategies work and my performance.
Let’s get started!
THIS WEEK’S SNAPSHOT
Momentum Outlook: the S&P 500 continued its upward momentum, breaking above the 5,200 mark following two weeks of declines. As long as no significant support levels are broken, the bulls remain solidly in charge, and the rally is likely to continue.
Weekly Momentum Pick: Microsoft (MSFT) is my stock pick for this week, a leading company within the Technology sector, trading less than 1% from its 1-year peak. Since 2019, my momentum picks have returned more than 400%.
Swing Trade Portfolio: 78% of my portfolio is invested across 20 positions. NVIDIA (NVDA, +98%) and Meta Platforms (META, +55%) are the best 2 performers. Since its inception in October 2023, my Swing Trade Portfolio has returned 26%.
Trading Week Reflection:
This week, I wanted to discuss how I manage my positions. I typically exit a position entirely only if the chart turns bearish. However, when a stock's rally becomes overextended, and we encounter resistance and increased volatility, just like NVDA recently, I prefer to secure some profits. It is also a great way to keep my emotions in control so I can stomach the increased volatility. And, remember, my approach is not about predicting the exact high or low, which I think is more a matter of luck than skills. Instead, I aim to capture a substantial portion of strong uptrends.
Looking to the week ahead, I'm satisfied with the current state of my trading portfolio, thanks to the clear trends we've been riding. The only uncertainty lies with cryptocurrency. Despite the long-term trend remaining strong, I'm cautious about a potential deeper pullback that might prompt me to exit.
WEEKLY MOMENTUM PICK
My Approach
I use a proprietary algorithm to collect momentum indicators for each company on my watchlist, such as performance over the last one and three months and the current price vs. their respective 52-week high and low. I then rank the stocks based on each indicator, assigning a score from highest to lowest, and the stock with the highest average score becomes my pick for the week.
From there, I developed a simple trading principle: I buy one stock on Monday at the market open and sell it by Friday's close. I focus on the 30 stocks from the Dow Jones (+ Alphabet). Because the strategy rewards winners, it is usual for the algorithm to select the same stock for multiple weeks in a row.
My Performance
Since 2019, my stock picks have consistently generated strong returns, both in absolute terms and compared to the S&P 500 index. The cumulative return on my weekly momentum picks has been +433% since 2019 (when traded with stop-loss), outperforming the S&P 500 by 5x.
My stock pick was up 2.9% last week, bringing my 2024 performance to 5%.
My Momentum Pick for This Week
My stock pick for week #13 of 2024 is Microsoft (MSFT). The stock has risen 4% in the past month and 16% in the past quarter and is now trading less than 1% from its 52-week high. That makes MSFT the stock with the best momentum profile on my watchlist.
I use a 2% stop-loss and a 6% profit target. Stop-losses are critical elements of any trading plan, particularly in periods of market volatility.
Confidence Level: HIGH
Momentum Conditions: Positive | Algo Score: 89
The confidence level is a qualitative assessment based on my experience trading these stock picks. Best-performing picks typically involve 1) supportive broader market conditions and 2) an algo score below 94, meaning the stock has room to run further.
That’s it for the free part of my Weekly Trading Update.
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