Weekly Trading Update #3 (Jan 15)

The only stocks you need to watch this week, hand-picked by my proprietary algorithm

Dear subscribers,

It's Monday, and that means it's time for my Weekly Trading Update!

All of my trading is derived from the proprietary algorithm and research I have developed analyzing various technical and momentum indicators over the years.

Stay tuned to learn more about how my trading strategies work and my performance. And happy investing!

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THIS WEEK’S SNAPSHOT

• Momentum Outlook: Risk-on assets, particularly tech and growth stocks, regained momentum last week. Despite this, the S&P 500 has been trapped in a 100-point range since mid-December and has repeatedly failed to surpass the 4,800 level, its previous all-time high.

• 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%.

• EMA Swing Trade Portfolio: 84% of my portfolio is actively invested across 22 different positions. Caterpillar (CAT | +19%) and Costco (COST | +19%) are the best 2 performers (excl. cryptos). Since its inception in October 2023, my EMA Swing Trade Portfolio has risen by 9%.

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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, 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 +405% since 2019 (when traded with stop-loss), outperforming the S&P 500 by 5x.

Last week, my stock pick was down by 3.3%, bringing my performance in 2024 to 0%.

My Momentum Pick for This Week

My stock pick for week #3 of 2024 is Microsoft (MSFT). The stock has risen 4% in the past month and 17% 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 up. It can be a valuable tool to size a position.

That’s it for the free part of my Weekly Trading Update!

I hope you enjoyed my analysis so far! If so, and 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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