Weekly Trading Update #17 (Apr 22)
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 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: 3rd consecutive weekly loss for the markets, and the pullback many called for is finally upon us. Until we recapture a resistance level, we need to expect more pain.
Weekly Momentum Pick: American Express (AXP) is my stock pick for this week, a leading company within the Financial sector, trading less than 1% from its 1-year high. Since 2019, my momentum picks have returned more than 400%.
Swing Trade Portfolio: 25% of my portfolio is invested across 7 positions. Meta Platforms (META, +46%) and Caterpillar (CAT, +46%) are the best 2 performers. Since its inception in October 2023, my Swing Trade Portfolio has returned 23%.
Trading Week Reflection:
The trading portfolio has recorded its highest number of sales in a single week since its inception, triggered by the recent shift to a bearish market trend. As we navigate this first challenging period, I wanted to step back and share transparently my expectations for the portfolio for the coming weeks:
If we see a deeper market pullback: I expect to outperform, as I will likely hold mostly cash.
If the market reverses and resumes its upward trajectory: Initially, I may lag behind the market. However, I anticipate catching up and ultimately outperforming as the rally resumes.
If the market moves sideways: This scenario poses a significant challenge due to the lack of clear direction. I might experience frequent transactions with limited gains.
While my momentum-based approach will struggle without a clear direction, I remain convinced of its long-term value. By waiting for firm trend confirmation before acting, I'm poised for substantial success during favorable conditions while protecting my gains during turbulent times.
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, the algorithm usually selects 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 +423% since 2019 (when traded with stop-loss), outperforming the S&P 500 by 5x.
My stock pick was down 2.8% last week, bringing my 2024 performance to 3%.
My Momentum Pick for This Week
My stock pick for week #17 of 2024 is American Express (AXP). The stock has risen 1% in the past month and 13% in the past quarter and is now trading less than 1% from its 52-week high. That makes AXP 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: LOW
Momentum Conditions: Weak | Algo Score: 95
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.
I hope you enjoyed my analysis so far. If you’d like to see more in-depth insights, subscribe to the paid version and get complete access to my short and long-term portfolios!
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