Best of the Worst

by | May 16, 2023

Following momentum is never a bad idea. 

The longest-running, most successful strategy (with the most data behind it) is trend following.

And if we’re going to follow trends, it makes sense that we should find trending instruments that are also in trending groups.

Stacking momentum on top of momentum makes sense and is a motto of many famous traders.

But value sure is appealing. Picking up a gold nugget in a pile of garbage is incredibly rewarding–and also incredibly profitable. 

When a maligned stock turns into a loved one, the resulting move can be a monster.

Which is why it’s not a bad idea to find the best stock in the bad sector. It’s worth considering the very best of the worst as a small part of a portfolio.

And right now that profile fits HSBC Holdings plc (HSBC).

As everyone knows, banking has gotten hammered. And rightfully so, in some cases.

But not every case.

Yes, banking is one of the worst sectors in the world. 

But HSBC has been doing quite well. Since 2022, HSBC has beaten the market by about 40%.

Further, despite all the chaos, HSBC is sitting nicely above its long-term moving average.

Best of the Worst

Following momentum is never a bad idea. 

The longest-running, most successful strategy (with the most data behind it) is trend following.

And if we’re going to follow trends, it makes sense that we should find trending instruments that are also in trending groups.

Stacking momentum on top of momentum makes sense and is a motto of many famous traders.

But value sure is appealing. Picking up a gold nugget in a pile of garbage is incredibly rewarding–and also incredibly profitable. 

When a maligned stock turns into a loved one, the resulting move can be a monster.

Which is why it’s not a bad idea to find the best stock in the bad sector. It’s worth considering the very best of the worst as a small part of a portfolio.

And right now that profile fits HSBC Holdings plc (HSBC).

As everyone knows, banking has gotten hammered. And rightfully so, in some cases.

But not every case.

Yes, banking is one of the worst sectors in the world. 

But HSBC has been doing quite well. Since 2022, HSBC has beaten the market by about 40%.

Further, despite all the chaos, HSBC is sitting nicely above its long-term moving average.

A break above $38.30 could change this best-of-the-worst stock to best-of-the-best. 

Happy trading,

Scott

Happy trading,

Scott

WRITTEN BY<br>Scott Welsh

WRITTEN BY
Scott Welsh

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