Weekly Trading Update #8 (Feb 19)

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

Dear subscribers,

As we head into a new week, 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.

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THIS WEEK’S SNAPSHOT

• Momentum Outlook: The S&P 500 ended its five-week winning streak, yet we're not close to a bearish trend reversal. This week, NVIDIA earnings will have significant implications for the broader market.

• Weekly Momentum Pick: American Express (AXP) is my stock pick for this week, a leading company within the Financial sector, trading less than 1% from its 1-year peak. Since 2019, my momentum picks have returned more than 400%.

• Swing Trade Portfolio: 93% of my portfolio is invested across 21 positions. Meta Platforms (META, +44%) and NVIDIA (NVDA, +53%) are the best 2 performers. Since its inception in October 2023, my Swing Trade Portfolio has risen by 19%.

Trading Week Reflection:

If you read my weekly market recap, you know I have been anticipating a pullback for weeks. I was convinced the hot CPI report was to bring us a much deeper sell-off. But the bears never really follow through.

In the past, I would have overreacted by selling off many positions on Tuesday. However, this time, I only exited from Apple and Google. And my portfolio closed at an all-time high on Friday. That shows the importance of having a disciplined system to manage your portfolio.

This week, we have another potential significant market catalyst with NVIDIA earnings. The same principles will apply: no overreaction, but I'll be ready to act if the data and price action require it.

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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 +423% since 2019 (when traded with stop-loss), outperforming the S&P 500 by 5x.

My stock pick was down 3.9% last week, bringing my 2024 performance to 3%.

My Momentum Pick for This Week

My stock pick for week #8 of 2024 is America Express (AXP). The stock has risen 18% in the past month and 33% in the past quarter and is now trading less than 1% from its 52-week high. That makes AXP 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: 93

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. It can be a valuable tool to size a position.

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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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