The final list of double screened output for last week resulted in 18 charts with multiple buy signals, and 57 with more than one sell signal. On Friday alone there were just 20 buy signals and 113 sell signals.
Those two stats suggest a weak week. But as I pointed out in this week’s market update, the broad market indicators suggest that the up phase should still have a little life before it rolls over. With that context, I said that I’d be cautious about adding shorts.
With 57 sells to choose from, it was hard to resist picking short sales. There were a few that I liked. They’re probably a little early, but the risk reward potential over time seems good. So I chose 3 to add to the list as of Monday’s opening price, xx, xxx, and xxxx. Each would seem to have a bearish narrative as well. Not that that matters, but it enhances my comfort level with the choices.
Not that that matters, either. 😁
Last week, the list had an average gain of 8% with an average holding period of 2½ weeks, including picks closed during the week, and those still open on Friday. That worked out to an average gain of 3.3% per week.
The percentage gain is based on 100% cash positions, with no margin and no use of leverage or options.
Last week’s overall performance was down from +11% with a similar holding period, in the previous week. We expected this.
5/31/22 We have to be careful though. We’ve seen previously that when the list has double digit gains, the stocks on the list have reversed sharply. So I continue to tighten stops to close out the pick at an opportune time and protect profits.
Three picks did hit their stops last week. All were longs. One had a nice gain, but it was canceled out by two losers. Five picks remain open. Four have gains. I have again adjusted stops on the open picks.
Meanwhile, picks closed out in May averaged a gain of 3% on an average holding period of 2 weeks. That works out to an average of 1.5% per week. There were 28 closed picks. 25 were shorts. The 3 longs all came since May 16.
5/9/22 April was a challenging month. The final tally of closed picks in April had an average loss of 0.4% with an average holding period of 11 calendar days. My system does not do well when the average low to low cycle duration drops below 4 weeks.
March was better. Picks closed in March had an average gain of 4% with an average holding period of 23 calendar days.
This week we start with 8 picks including the 3 new picks. The 5 older picks are all longs. The 3 new picks are shorts.
I’ve again adjusted stop levels to protect profits and close out picks as they age. The new picks don’t have stops. I’ll add them next week.
All active picks and those closed last week are shown on the table below. Charts of new and open picks are below that.