Long IKEA
Building international exposure
Momentum, as a market edge, has been studied more than any other way to trade I have seen. Going back as far as 1966, Victor Niederhoffer wrote in “Market Making and Reversal on the Stock Exchange” about the persistence of stock momentum on breakouts.
Below is one of the three swing strategies over at StatsEdgePro. A simple idea that looks to take quick breakouts on consolidating stocks. Even with roughly a 50/50 win rate, we are able to book nice profits over time, sticking with winners.
One of the setups we were watching this week was EWD 0.00%↑ which is an ETF representing the Swedish markets. The S&P 500 is back to all-time highs last week; however, that still only puts us up 5% YTD, with Sweden up nearly 25%.
Playing this relative to our performance on a simple breakout style makes our trade simple. If this momentum keeps up, we want to be in holding for a week or two. Our stop is pretty tight around $45.25.
If we are right, we should continue to break here, and if we are wrong, we are out quickly and moving on.
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