Weekly Trading Update #49 (Dec 2)

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.

Before we dive into this week’s update, remember today is the last day to get 50% off a full year of My Weekly Stock. As a paid subscriber, you’ll gain exclusive access to my 3 winning portfolios—and so much more: a clear investing framework, my momentum-based analysis and live portfolio updates.

If you’re ready to give it a try—or just want to support my work—this is your chance!

Let’s get started!

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THIS WEEK’S SNAPSHOT

• Momentum Conditions: The S&P 500 closed the holiday-shortened week above 6,000, and with positive momentum intact, the stage is set for a potential year-end rally.

• Weekly Momentum Pick: $WMT (Walmart Inc) is my stock pick for this week, a leading company within the Consumer Defensive sector, trading 0% from its 1-year high. Since 2019, my momentum picks have returned 612%, cumulatively.

• Swing Trade Portfolio: 74% of my portfolio is invested across 19 positions. Netflix ($NFLX, +36%) and Bitcoin (BTCUSD, +62%) are the best 2 performers. Since its inception in October 2023, my Swing Trade Portfolio has returned 38%.

Trading Week Reflection:

All portfolios ended the week in positive territory, benefitting from supportive momentum conditions, with Consumer Defensive and Cyclicals outperforming—highlighting the importance of having a well-diversified watchlist across sectors.

I didn't make any transactions after Monday last week, but the coming one will surely be more active. Today, I plan to add a promising cyclical name to the Swing Trade portfolio, which I've eyed for some time. Additionally, I'm making significant updates to the long-term stock portfolio, with 4 sales and 4 new additions. Make sure to check out the end of this post!

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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 +612% since 2019 (when traded with stop-loss), outperforming the S&P 500 by 4x.

My stock pick was up 0.5% last week, bringing my 2024 performance to 41%.

My Momentum Pick for This Week

My stock pick for week #49 of 2024 is $WMT (Walmart Inc). The stock has risen 14% in the past month and 20% 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. 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: Positive | 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 short-term 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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