Has President Trump TACO (Trump Always Chickens Out) again?
This time, it’s regarding Greenland. Just a couple of weeks back, President Donald Trump threatened to use force to get hold of Greenland. Denmark and Greenland didn’t budge.
What happened next was the announcement of tariffs on several European nations that opposed the US takeover. Just as the tariffs were set to kick in, President Donald Trump announced that they wouldn’t be implemented because a framework is being discussed.
The stock market loved the announcement, jumping by more than 1%.
Against this dramatic backdrop, I’ve unearthed a gem for a swing trade.
But before I analyze this week’s stock pick, let’s review last week’s #PowerStocks pick: Edison (EIX).
Review Of Last Week’s Pick Of The Week
Edison (EIX) was last week’s stock pick.
It’s a huge utilities company that focuses on generating renewable energy.
After soaring by 7.1%, a pullback was anticipated.
It came immediately, and the share price of Edison dipped a little below its support area.
Thankfully, its share price rose and bounced! It’s game on.
Where do I plan to take profit at?
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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 Darden Restaurants (DRI) Worth It?
Source: darden.com
Darden Restaurants belongs to the Consumer Discretionary sector which has been rising consistently.
Blessed with a massive market capitalization of almost $24b, Darden Restaurants is the 5th most valued restaurant in the world.
While the shares of some large-cap companies suffer from lethargy, Darden Restaurants’ shares tend to explode upwards consistently — each of its explosive upmoves measures between 4% and 17.6%.
A pullback is here, presenting a potential swing trading opportunity to ride its next huge 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 Darden Restaurants (DRI)
What’s the 1st thing I’d like to analyze from the chart above?
The price trend of the shares of Darden Restaurants.
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 Darden Restaurants 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 Darden Restaurants’ 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 Darden Restaurants’ 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 Darden Restaurants’ shares.
Here are the statistics:
In the past 3 months, the S&P 500 has risen by 1.7% while the share price of Darden Restaurants has shot up by 11.5%, outperforming the S&P 500 by almost 7x!
Great! I want to buy the shares of Darden Restaurants.
But are there more points to consider?
How Explosive Is Darden Restaurants (DRI)?
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 Darden Restaurants been able to explode upwards consistently?
I was left in awe while marking out its explosive upmoves.
Darden Restaurants enjoys a massive market capitalization of nearly $24b. Its shares are valued at around $206 each. Yet, its shares have been able to explode upwards 17 times in the past 11 months, with each upmove measuring between 4% and 17.6%!
The shares of huge companies are usually more lethargic!
Talking about market capitalization, I love it that Darden Restaurants enjoys such an enormous 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 Darden Restaurants 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 Darden Restaurants’ shares is here?
Yes!
Here’s how I do it – by uncovering the key price levels (also known as support and resistance zones) of Darden Restaurants’ shares. And that’s what I’ve done in the chart above.
Having risen 17.6% in 2 weeks, its share price is pulling back. And this is great news!
Seeing a support area at around $201, I would like to see its shares continue pulling back to $201 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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Worse still, ~80% of traders lose money.
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