Individual stocks on February 23, 2018: strategy


I stated that even a simple quantitative strategy can be used to successfully pick & trade individual stocks over the long run. Here are the simple strategy’s BUY and SELL signals in action.
The simple strategy says that in a bull market

  1. You should only go long stocks with above average earnings growth. The S&P 500’s projected earnings growth is 15.3% for 2018.
  2. You should only go long stocks that are above their 50 daily moving averages (CLOSE). This is essentially a momentum play for trend followers.

We’re looking at the following stocks today:

  1. Amazon
  2. AT&T
  3. GE
  4. Wells Fargo
  5. Apple

Amazon (AMZN)

Amazon is expected to see an earnings increase of 86% in 2018. This is much more than the S&P’s forecasted earnings growth of 15% in 2018.
Amazon is above its 50 sma. Its earnings growth is superior to that of the S&P 500’s. Based on the simple strategy, you should go long Amazon with a stop loss at Amazon’s 50 sma

AT&T (T)

AT&T is expected to see an earnings increase of 0.25% in 2018. This is a little less than the S&P’s forecasted earnings growth of 15% in 2018.
AT&T is below its 50 sma. Its earnings growth is also subpar. Based on the simple strategy, stock pickers shouldn’t go long AT&T right now.

GE (GE)

GE is expected to see an earnings decrease of -5.8% in 2018. This is much less than the S&P’s forecasted earnings growth of 15% in 2018.
GE is below its 50 sma. Its earnings growth is also subpar. Based on the simple strategy, stock pickers shouldn’t go long GE right now.

Wells Fargo (WFC)

Wells Fargo is expected to see an earnings increase of 14.8% in 2018. This is a little less than the S&P’s forecasted earnings growth of 15% in 2018.
Wells Fargo is below its 50 sma. Its earnings growth is also a little less than the S&P’s earnings growth. Based on the simple strategy, stock pickers shouldn’t go long Wells Fargo right now.

Apple (AAPL)

Apple is expected to see an earnings increase of 24% in 2018. This is more than the S&P’s forecasted earnings growth of 15% in 2018.
Apple is above its 50 sma. Its earnings growth is superior to that of the S&P’s. Based on the simple strategy, stock pickers should be long Apple right now with a stop loss at the 50 sma.

Read Individual stocks on February 22, 2018: strategy

2 comments add yours

  1. Curious, on another page of your website you show that you are short AAPL, but above you say go long AAPL. Did I miss something?

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