Weekly Trading Update #54 (Jan 13, 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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SUMMARY

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

  • $WMT (Walmart Inc) is my stock pick for this week, a leading company within the Consumer Defensive sector, trading less than 4% from its 1-year high

  • Last week’s pick delivered a -2.0% return, bringing my 2025 performance to -2.0%.

  • Since 2019, my momentum picks have achieved a 62% hit rate and returned 642%—outperforming the S&P 500 by 4x.

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

  • Last week, I sold 2 positions and initiated 3 new ones. For the week ahead, I’m planning 2 sales and 2 buys.

  • The portfolio is currently allocated as follows: 23% in Growth, 15% in Cyclical, 0% in Defensive, and 62% in Cash. Last week, I increased my exposure in cyclical.

  • I own 9 positions, with 6 currently in profit. The top performers are Tesla ($TSLA, +46%) and Bitcoin (BTCUSD, +57%).

  • Since its inception in October 2023, my Swing Trade Portfolio has returned 34%.

Trading Week Reflection:

It was a tough and frustrating week to trade. Monday started on a high note, with many stocks rallying as technical setups suggested. However, it turned into a failed breakout, dragging the market back into its consolidation range. The Swing Trade Portfolio fared slightly better than the broader market due to being underinvested, but that’s little consolation.

I’m rotating the portfolio with slightly more exposure to defensives, though I remain underinvested overall. I’ll likely lag if we see a bounce, but I’ll be better protected if market weakness continues. Given the weak momentum conditions, which remain challenging for swing traders, staying disciplined and adhering strictly to the rules is critical. After all, these rules are designed to protect us from making impulsive decisions when market conditions deteriorate.

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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 +642% (when traded with a stop-loss), surpassing the S&P 500 by 4x.

Last week, my stock pick lost 3.6% (-2% using stop-loss), bringing my 2025 performance to -2%.

Momentum Pick of the Week

My stock pick for week #2 of 2025 is $WMT (Walmart Inc). The stock has lost 1% in the past month and gained 16% in the past quarter, currently trading less than 4% from its 52-week high. That makes $WMT 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: 93.5

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.