Strong bright lights, a stage full of performers, music pumping out from the ginormous speakers after the military parade had concluded.
It was a sight to behold.
I was lucky to attend Singapore’s National Day Parade preview a few years ago.
The atmosphere was electrifying.
There’s something that’s equally electrifying. Can you guess what it is?
Yes, it’s the US stock market.
After a 1.6% drop on 1 Aug, the S&P 500 picked itself up and inched upward. If this continues, we could see a new all-time high soon.
This bullishness in the market is welcomed, and the #PowerStocks pick for this week could benefit. But before I share about this week’s pick, let’s review last week’s #PowerStocks pick: General Dynamics (GD).
Review Of Last Week’s Pick Of The Week
General Dynamics (GD) was last week’s stock pick.
It’s a massive defense and aerospace company.
Having risen 9.1% in a short time recently, a pullback emerged.
I was anticipating its shares to dip further and test its support area around $308 before buying them.
Luck wasn’t on my side as its shares soared from the open last week.
The shares of General Dynamics are up by almost 1% since.
Am I still looking to buy its shares for an explosive swing trade at around $308?
Head over to my Telegram Channel to find out!
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I know and understand that the allure of high returns without effort is highly attractive. It breaks my heart when I hear of people falling for impersonation scams.
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Why Is Swing Trading Arista Networks (ANET) Worth It?
Source: arista.com
Arista Networks is a respectable technology company that develops and provides cloud networking solutions. It’s also a significant contributor to the AI industry.
Enjoying a massive market capitalization of nearly $175b, Arista Networks ranks among the largest 90 companies in the world.
Its massive market capitalization has not dampened the explosiveness of its shares, which have consistently risen between 7.3% and 38.4%.
Furthermore, the recent performance of Arista Networks has been jaw-dropping. While the S&P 500 had climbed 12.8% in the past 3 months, the shares of Arista Networks shot up almost 60% in the same time period!
I sense a pullback coming, providing a fantastic opportunity to buy its shares and ride its next explosive upmove.
What’s my game plan?
Where’s a favorable price area to buy its shares at?
Continue reading to get the details.
P.S. What if I told you that you could drastically gain control over your emotions of fear and greed, and master the stock market in a short amount of time?
My team and I have worked tirelessly to help you achieve results fast.
Click on the banner below to claim your stock course for free (limited time) now!
Performance Of US Stock Market vs Arista Networks (ANET)
The very 1st thing I want to know is the trend of Arista Networks’ shares.
Knowing the trend of its shares allows me to determine whether I’d look for a buying or shorting opportunity because following its price trend will sharply increase my chances of profitability.
Looking at the chart above, its shares are in a steady and strong uptrend. Hence, I’d like to find an opportunity to buy its shares.
What’s next?
I’ll compare the performance of its shares against the S&P 500.
Why?
I want my hard-earned money to work hard for me. A stronger performing stock is likely to continue bringing a larger-than-market return. So, I’ll have a look at the comparison chart above again.
While the S&P 500 has risen 12.8% in the past 3 months, the shares of Arista Networks have risen nearly 60%! That’s a 4.6x outperformance!
I’m excited. I can’t wait to buy its shares for an explosive swing trade.
Should I do just that now?
How Explosive Is Arista Networks (ANET)?
No, I shouldn’t rush to buy its shares without a deeper analysis.
Since I plan to buy its shares and capitalize on its next upmove rather than accompanying it when it pulls back, my holding period will be around a week or 2. Therefore, I want its shares to have the ability to explode upwards.
Have the shares of Arista Networks been able to explode upwards consistently?
Marking out the explosive upmoves for the past 11 months has left me stunned.
There are 24 explosive upmoves, with each measuring between 7.3% and 38.4%!
My eyes popped out more when I discovered the size of Arista Networks.
This company enjoys a whopping market capitalization of nearly $175b! This ranks Arista Networks among the world’s top 90 largest companies.
Additionally, I appreciate that Arista Networks enjoys an enormous market capitalization, as this provides an extra layer of security against manipulation. I don’t wish to lose my hard-earned money to manipulation that could be easily prevented!
Here comes the golden question: Is it time to buy the shares of Arista Networks for an explosive swing trade?
Key Price Levels
Timing is crucial for many things in life. This includes stock trading and investing.
Buying an explosive stock at the wrong time can result in significant losses and emotional distress. This will cause you to lose confidence, and you’ll doubt yourself even when a fantastic trading opportunity arises straight from under your nose!
Is there a way to tell whether the time to buy the shares of Arista Networks is here?
Fortunately, yes!
You can do so by uncovering its key price levels (also known as support and resistance zones). And that’s what I’ve done in the chart above.
After breaking out and rising 20.1% due to excellent earnings, I smell a pullback coming.
When the pullback comes, there’s a high chance for its shares to fall to around $133.50 before rising.
Therefore, I’m waiting for the shares of Arista Networks to pull back to around $133.50 and bounce before buying them to catch its next explosive upmove.
Here’s a pro tip: Instead of staring at your screen, consider setting a price alert on your broker’s platform to be notified so that you can spend precious time with your loved ones.
Which Instrument Should You Consider Using?
Do you ever wonder about the instrument used to trade explosive stocks?
With 3 main trading instruments available – stocks, contract-for-difference (CFD), and options, you wonder which suits you best.
Since stocks (as an instrument) is easy to understand, I shall focus on CFD and options.
Here are the main similarities and differences:
CFD works like a mirror to stocks. When a stock rises $1, its CFD rises $1.
However, due to its unique pricing mechanism, your options price doesn’t rise by the same amount. In fact, depending on the market conditions, the price of your options contract may even drop!
Your CFD broker will charge you a finance fee for lending you money for your trade. However, no lending is required for options, so there is no finance charge.
Because there’s a finance charge by your CFD broker, CFD is not the ideal instrument for mid to long-term trades. On the other hand, options allow you to implement different strategies across time horizons.
Both CFDs and options are leveraged instruments because they allow you to control a larger market position with a smaller amount of capital.
While CFDs do not have an expiration date, options traders must pay attention to the expiration date of their options contracts.
You must be thinking, “What’s the beauty of trading options?”
Options are like smartphones. You can choose to use a smartphone for its basic or advanced functions.
And options don’t have to be all about Math and dry!
It can be made easy to understand through real-life analogies.
In the same way, you can implement basic and/or highly advanced strategies depending on your level of comfort.
Options allow you to be versatile in adapting to the shifting market conditions and capturing opportunities in the process.
Are you a CFD or options trader?
I’m glad to be fluent in both.
Finally, this is for educational purposes. Please perform your due diligence.
All images are taken from pexels.com, pixabay.com, sectorspdrs.com, tradingview.com, and unsplash.com, unless otherwise mentioned.
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The stock market is full of traps laid out by professional traders.
Many new traders are often left confused by conflicting signs and signals.
Worse still, ~80% of traders lose money.
This is because trading isn’t just about skill alone.
It includes the mastery of your emotions.
But what if I told you that you could quickly gain control over your emotions of fear and greed and master the stock market?
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