Every week stock traders daily issues a recommendation to clients as part of the strategy called the stock of the week strategy. The objective of this strategy is to select one stock or ETF per week to trade, specific trading strategies are offered for that stock or ETF, and the objective is to make sure that we in the week in cash no matter what transpires during the week.
This week, the ETF we selected was the double ETF for the Russell 2000 (NYSEARCA:UWM). This ETF was selected in part because we noticed relative resiliency and the Russell 2000 when compared to other markets during the market declines last week. It was part of a correlated market observation and the focus on the Russell 2000 was conscious and objective given that observation of relative out performance with the expectation that if the markets did manage to stabilize the Russell 2000 would probably perform best.
The trading plan is: Buy UWM above 82.64, target 87.78, Stop Loss @ 82.38
According to rule, this trading plan triggered today when UWM moved above $82.64 and according to rule we are holding onto this position with additional expected upside. The stop loss is in place in case this position turns against us.
The stock of the week strategy is not a buy and hold strategy, it is designed for traders who believe that proactive and risk controlled trading strategies provide them with opportunities to make money no matter where the market goes, and the stock of the week strategy has a track record that dates back to December, 2007, before the credit crisis. More information can be obtained about the Stock of the Week Strategy here: Stock of the Week.
Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Business relationship disclosure: By Thomas H. Kee Jr. for Stock Traders Daily and neither receives compensation from the publicly traded companies listed herein for writing this article.