Weekly Trading Update #22 (May 27)
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: The S&P 500 had a mixed week despite another blockbuster earnings report from Nvidia. We might see more chop in the week ahead, but I'm not concerned as long as we don't lose any significant support.
Weekly Momentum Pick: Walmart (WMT) is my stock pick for this week, a leading company within the Consumer Defensive sector, trading less than 1% from its 1-year high. Since 2019, my momentum picks have returned more than 400%.
Swing Trade Portfolio: 69% of my portfolio is invested across 17 positions. Alphabet (GOOG, +18%) and Nvidia (NVDA, +19%) are the best 2 performers. Since its inception in October 2023, my Swing Trade Portfolio has returned 25%.
Trading Week Reflection:
The swing portfolio's performance last week mirrored the general market conditions. While a few positions, such as Nvidia, crypto, and Netflix, yielded significant gains, the average stock faced more challenges.
While the market's recovery from April's low is still in progress, I'd like to see more setups leading to a sustained move above previous all-time highs. Until then, I remain cautious and look for any signs of a negative reversal.
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 +456% since 2019 (when traded with stop-loss), outperforming the S&P 500 by 4x.
My stock pick was down 0.7% last week, bringing my 2024 performance to 10%.
My Momentum Pick for This Week
My stock pick for week #22 of 2024 is Walmart (WMT). The stock has risen 9% in the past month and 10% in the past quarter and is now trading less than 1% from its 52-week high. That makes WMT 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: Strong | Algo Score: 92
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!
Keep reading with a 7-day free trial
Subscribe to My Weekly Stock to keep reading this post and get 7 days of free access to the full post archives.