Weekly Trading Update #14 (Apr 1)
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 just wrapped a very strong Q1, up double digits and posting yet again another all-time high. As long as no significant support levels are broken, the bulls remain solidly in charge, and the rally will likely continue.
Weekly Momentum Pick: Caterpillar (CAT) is my stock pick for this week, a leading company within the Industrial sector, trading less than 1% from its 1-year peak. Since 2019, my momentum picks have returned more than 400%.
Swing Trade Portfolio: 75% of my portfolio is invested across 19 positions. NVIDIA (NVDA, +89%) and Bitcoin (BTCUSD, +60%) are the best 2 performers. Since its inception in October 2023, my Swing Trade Portfolio has returned 27%.
Trading Week Reflection:
The week brought a serene close to an outstanding Q1 for the trading portfolio, up 17% in 2024 and 27% since its start in Oct 2023.
I see a shift in leadership within the portfolio, with CAT, DIS, and oil stocks stepping to the forefront while some of the tech names are in a consolidation phase. Additionally, TSLA and AAPL will finally wake up at some point and provide good trading opportunities, maybe already in Q2.
That's the value of diversification. A comprehensive watchlist spanning all market segments consistently uncovers attractive buying opportunities. It is an effective approach to managing your risk and benefitting from different market cycle stages. On to a successful Q2 now.
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 +428% since 2019 (when traded with stop-loss), outperforming the S&P 500 by 5x.
My stock pick was down 1.1% last week, bringing my 2024 performance to 4%.
My Momentum Pick for This Week
My stock pick for week #14 of 2024 is Caterpillar (CAT). The stock has risen 11% in the past month and 23% in the past quarter and is now trading less than 1% from its 52-week high. That makes CAT 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: MEDIUM
Momentum Conditions: Positive | Algo Score: 97
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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