Weekly Trading Update #53 (Jan 6, 2025)

Momentum-driven stock picks and swing trades, powered by my proprietary research.

Dear readers,

Welcome back to My Weekly Stock, where in-depth market analysis meets proven momentum-based trading strategies. My mission? To help you win in the markets with unbiased, data-driven insights you can act on.

Over the years, I've developed a proprietary momentum-based approach, enabling me to ride strong trends confidently. Every week, I dedicate hours to researching, analyzing, and curating data—I do all the hard work so you don't have to.

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As we head into a new week, it means it's time for my Weekly Trading Update! In this post, I'll cover my two short-term trading strategies: Weekly Momentum Pick and Swing Trade Portfolio. Stay tuned to learn about my approach, recent moves (or planned ones), and how my strategies have performed.

Let's dive in!

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1. SUMMARY

• Weekly Momentum Pick (my short-term tactical play): 

  • $AXP (American Express) is my pick this week, a leader in the Financial sector, trading just 3% below its 1-year high.

  • Last week’s pick delivered a 0.1% return, bringing my 2024 performance to 50%.

  • Since 2019, my momentum picks have achieved a 62% hit rate and returned 657%—outperforming the S&P 500 by 4x.

• Swing Trade Portfolio (my comprehensive mid-term strategy): 

  • Last week, I sold 6 positions and initiated 0 new ones. For the week ahead, I’m planning 3 new buys.

  • The portfolio is currently allocated as follows: 25% in Growth, 5% in Cyclical, 0% in Defensive, and 70% in Cash. Last week, I reduced my overall exposure across segments.

  • I own 8 positions, with all currently in profit. The top performers are Tesla ($TSLA, +52%) and Bitcoin (BTCUSD, +63%).

  • Since its inception in October 2023, my Swing Trade Portfolio has returned 35%.

Trading Week Reflection:

Heading into Christmas, I significantly reduced my exposure in the trading portfolio as market momentum slowed. The choppy price action during the holidays didn't make me regret that decision. Starting the year with just 30% of cash invested, I now have ample room to deploy more aggressively. I plan to make 3 new buys today, with several other promising opportunities on my radar should market conditions improve.

As this is the first update of the new year, I've made some enhancements to the weekly trading update, including an updated watchlist to ensure better coverage, diversification, and potential for gains. Wishing you all a wonderful and successful 2025!

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1. WEEKLY MOMENTUM PICK

Approach

I use a proprietary algorithm to evaluate momentum indicators for each company on my watchlist, including the 1-month and 3-month returns and the performance relative to their 52-week high and low. Each stock is then ranked based on these indicators, with a score assigned from highest to lowest. The stock with the highest average score becomes my pick for the week.

My trading plan is straightforward: I buy the stock pick at the market open on Monday and sell it by Friday's close. This strategy focuses on the 30 stocks in the Dow Jones (plus Alphabet). As the algorithm rewards consistent winners, it is not uncommon for the same stock to be selected for multiple weeks in a row.

Performance

Since 2019, my stock picks have delivered consistently strong returns, significantly outperforming the S&P 500. The cumulative return on my weekly momentum picks stands at +657% (when traded with a stop-loss), surpassing the S&P 500 by 4x.

Last week, my stock pick gained +0.1%, bringing my 2024 performance to +50%.

Momentum Pick of the Week

My stock pick for week #1 of 2025 is $AXP (American Express Co). The stock has gained 0% in the past month and 13% in the past quarter, currently trading less than 2% from its 52-week high. That makes $AXP the stock with the best momentum profile on my watchlist.

The entry price is always Monday's market open. I then calculate a 6% profit target and a 2% stop-loss limit based on the entry price. These levels are used as performance benchmarks. If the price breaches the stop-loss or profit target during the week, I assume an exit at that level. I don't sell on Monday if the stop-loss is hit, but I sell if the profit target is reached. I exit at Friday's close if none of these conditions are met.

While my personal entry and exit prices may vary slightly— for better or worse, the simplified approach makes tracking performance clearer and easier to replicate.

Confidence Level: Medium

• Momentum Conditions: Mixed

• Algo Score: 92

The confidence level reflects my qualitative assessment based on my experience with these stock picks. The best-performing picks often exhibit two key traits:

1. Supportive broader market conditions.

2. An algo score below 94, indicating the stock still has room to run.