Weekly Trading Update #9 (Feb 26)
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.
THIS WEEK’S SNAPSHOT
Momentum Outlook: The S&P 500 resumed its upward trajectory and reached another new all-time high. The bulls retain control as long as we don't breach a major support level.
Weekly Momentum Pick: Amazon (AMZN) is my stock pick for this week, a leading company within the Consumer Cyclical 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, +48%) and NVIDIA (NVDA, +67%) are the best 2 performers. Since its inception in October 2023, my Swing Trade Portfolio has returned 21%.
Trading Week Reflection:
This week was another positive for the swing trade portfolio, with many holdings reaching new highs. We saw no transactions for the first time since the portfolio's inception. While we often crave excitement and activity, the lack of transactions highlights the clarity and strength of the trends. I'm considering taking profits on some positions but am still pondering the optimal timing.
Let's remember that market conditions won't always be this favorable. We'll inevitably face more challenging times, including periods of false breakouts and consolidations, which can be particularly tough for a momentum/trend strategy. But for now, let's appreciate this moment.
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 +432% since 2019 (when traded with stop-loss), outperforming the S&P 500 by 5x.
My stock pick was up 1.7% last week, bringing my 2024 performance to 5%.
My Momentum Pick for This Week
My stock pick for week #9 of 2024 is Amazon (AMZN). The stock has risen 12% in the past month and 22% in the past quarter and is now trading less than 1% from its 52-week high. That makes AMZN 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: 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 broader market conditions and 2) an algo score below 94, meaning the stock has room to run further.
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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