School has ended for most students in Singapore. I foresee a surge in tourism in the coming weeks, leading up to Christmas.
Are you also going abroad this holiday season? Where?
As we enjoy our year-end trips, the stock market continues to move.
Yes, the US stock market hasn’t been the best of late, dropping over 4% in under a month. I think that this drop is ending, at least in the near term.
As fear continues to linger, defensive stocks could shine. These stocks are usually found in the Consumer Staples, Healthcare, and Utilities sectors.
While scanning the market, I found this defensive gem.
But before I analyze this week’s stock pick, let’s review last week’s #PowerStocks pick: Sphere Entertainment (SPHR).
Review Of Last Week’s Pick Of The Week
Sphere Entertainment (SPHR) was last week’s #PowerStocks pick.
It’s a media company that provides live entertainment, live sports events, and other programs.
I was expecting its share price to fall to its support area around $74 before rising. And it did!
Before I knew it, it had reached my take-profit level for a 4.8% gain.
Its share price is back at $74. I don’t think it’s a good idea to take this trade again for now.
How many days did the shares of Sphere Entertainment take to reach my take-profit level?
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 Walmart (WMT) Worth It?
Source: seeklogo.com
Walmart is a well-known chain retailer that operates both retail and wholesale.
With a gigantic market capitalization of almost $840b, Walmart is the world’s largest chain retailer. Its rival, Costco, is a distant 2nd.
While the shares of some massive-cap companies suffer from lethargy, Walmart shares tend to explode upwards consistently—each of its explosive upmoves measures between 4.4% and 20.1%.
After rising by 8.5% over 3 days, its shares are pulling back.
And I think that a fantastic swing trading opportunity is about to emerge, allowing me to 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 Walmart (WMT)
What’s the 1st thing I’d like to analyze from the chart above?
The price trend of the shares of Walmart.
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.
Can you tell that the shares of Walmart are in a steady and strong uptrend? Therefore, I’d like to find a buying opportunity.
What’s the next step?
I’ll compare the performance of Walmart’s shares against the overall market (aka S&P 500).
A comparison will flesh out the stronger performer. If the S&P 500 is the stronger performer, then I wouldn’t want to waste my time and money on Walmart’s shares, as I’m aiming for an outsized return.
So, let’s refer to the comparison chart again.
The S&P 500 has been underperforming when compared to the performance of Walmart’s shares.
Here are the statistics:
In the past 3 months, the S&P 500 has risen by 3.6% while the share price of Walmart has shot up by 7.5%, outperforming the S&P 500 by more than 2x!
Great! I want to buy the shares of Walmart.
But are there more points to consider?
How Explosive Is Walmart (WMT)?
Yes, there are more points to consider before buying its shares for an explosive swing trade.
Since I plan to buy its shares and capitalize on its next upmove, rather than sitting through its fluctuations, 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 Walmart been able to explode upwards consistently?
I was left in awe while marking out its explosive upmoves.
Walmart enjoys a massive market capitalization of nearly $840b. Its shares are valued at around $105 each. Yet, its shares have been able to explode upwards 17 times in the past 11 months, with each upmove measuring between 4.4% and 20.1%!
The shares of huge companies are usually more lethargic!
Talking about market capitalization, I love it that Walmart enjoys such a massive market capitalization because 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 Walmart for an explosive swing trade?
Key Price Levels
As with many things in life, timing matters.
The right thing done at the right time is the best thing that can happen.
Buying any 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!
So, is there a way to determine whether the time to buy Walmart’s shares is here?
Yes!
Here’s how I do it – by uncovering the key price levels (also known as support and resistance zones) of Walmart’s shares. And that’s what I’ve done in the chart above.
Having risen 8.5% in 3 days, its share price is pulling back. And this is great news!
Seeing a support and resistance area at around $106, and its shares around this price area, I would like to see its shares break out of $106 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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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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