The reason is simple: Despite the market bounce, SWY was hardly moving and its EV pattern looked poor. Comparatively, other stocks were doing better.
Let's not forget that the stock selection system is set to optimize the return for the next five days. This basically means buying strong momentum stocks that are pulling back into a buy zone. We are riding what other algos are detecting. This means that if some stocks start acting poorly, we need to doubt them.
As we can see below, KR and MDAS are also underperforming other stocks in the weekly list, so even though both were on the Friday buy list, I passed on them.
This leaves me with only two long positions and one short. This is not much and I am eager to increase the long trades.
We can see that both P and YOKU are doing well. The question is mainly regarding YOKU. It gained 6% on Friday. I sometimes sell half the position on a very strong day from a stock that is somewhat volatile.
I did that to my regret with EGN. Usually, the idea is to let strong stocks run. Hence, for YOKU I will probably just raise my stop just below the low of Thursday (around $28.4)
Regarding P, I just raised the stop.
ISRG is doing OK, although is seems to be attracting money. ISRG is one of the weakest stocks and seeing it bounce could be good information for the coming week. I will just keep it as a good hedge.
For Monday, I would be interested in SYNA, which looks very strong but might pull back to the buy zone. I missed it on Friday.
LL is also interesting and into its stable supply zone.
OAS is also interesting, but extended.
One last note: Four of the strongest stocks in the weekly list are Internet related. This is key information. Hence, I believe that other stocks in the same sector could do well this week, even though the stock selection did not single them out. You can see that YELP, SOHU, CYOU are doing well.
They all look like the "same trade." Hence, I believe that diversification in different sectors is appropriate, instead of following all the hot Chinese internet stocks.
