Weekly Trading Update #28 (Jul 8)

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.

To celebrate the first six months of the premium section of My Weekly Stock, you can enjoy a 30% discount off your first year of subscription. The offer is valid until the end of July, so don’t miss out!

Let’s get started!

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THIS WEEK’S SNAPSHOT

• Momentum Outlook: The S&P 500 surged to new highs and finally sustained a move above the 5,500 level. Confirmation will be required this week, with two inflation reports serving as tests.

• Weekly Momentum Pick: Apple (AAPL) is my stock pick for this week, a leading company within the Technology sector, trading less than 1% from its 1-year high. Since 2019, my momentum picks have returned more than 500%.

• Swing Trade Portfolio: 61% of my portfolio is invested across 16 positions. Alphabet (GOOG, +29%) and Costco (COST, +21%) are the best 2 performers. Since its inception in October 2023, my Swing Trade Portfolio has returned 29%.

Trading Week Reflection:

Given the typically low volume over the holiday week, I opted to hold off on new trades, preferring to wait for more reliable market movements.

After discussing Nike in my last update, I want to share insights into a very successful trade: Tesla. My position is up 33%, but it has been a challenging ride. I initiated a smaller-than-usual position at the end of April, mindful of the stock's long-term downtrend and significant overhead resistance. Then, Tesla went on a consolidation for two months, during which I even received a sell signal. However, I chose to stay invested because we stayed above support levels, and having a smaller position, I could afford to see how the consolidation would unfold. This decision paid off big time this week.

Beyond the lesson of patience here, I wanted to highlight the importance of adaptability. While 90% of my buy/sell decisions are based on my trend-based system, analyzing momentum and support/resistance allows me to customize my approach to fit specific scenarios. No two setups or stocks are identical and I always adapt to the circumstances at hand.

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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 +523% since 2019 (when traded with stop-loss), outperforming the S&P 500 by 4x.

My stock pick was up 3.2% last week, bringing my 2024 performance to 23%.

My Momentum Pick for This Week

My stock pick for week #28 of 2024 is Apple ($AAPL). The stock has risen 16% in the past month and 34% in the past quarter and is now trading less than 1% from its 52-week high. That makes $AAPL 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. I use stop-losses as price levels of interest to manage my positions, but I don’t set them up as automated orders. As a principle, I never sell on Mondays to give the trade a chance to work out.

Confidence Level: MEDIUM

Momentum Conditions: Strong | 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.

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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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