“Oh gosh, I’ve sold all my stocks earlier. And they’re soaring after my sale!”
That’s a conversation I overheard over dinner.
That person was referring to the popular saying, “Sell in May and go away” and was disappointed by it.
Wall Street has several cute sayings that you’ll want to dig deeper.
Since 2010, the S&P 500 has only been bearish in May for 4 out of 13 years — only 30% of the time.
On the contrary, the S&P 500 has been bullish 70% of the time in the past 13 years!
So, let’s uncover buying opportunities together.
Review Of Last Week’s Pick Of The Week
Qualcomm (QCOM) was shared last week.
It was also shared that we can reasonably expect its share price to fall to ~$175 and bounce higher before buying for a swing trading opportunity.
And this scenario played out last week, bringing you a gain of 3% (that’s if you caught this trade)!
As you ride this bullish burst happily, you may want to place a take-profit order at ~$188, as selling pressure could be strong at that price area.
If things go according to plan, you’ll enjoy a gain of ~6% in the days to come!
With that, let’s analyze this week’s swing trading opportunity: Arch Capital (ACGL).
Why Is Swing Trading Arch Captial (ACGL) Worth It?
Source: archgroup.com
Arch Capital (ACGL) is this week’s #PowerStocks pick.
It is an insurance company and belongs in the financials sector.
Why should you pay attention to this stock?
While the S&P 500 is up 10.3% year-to-date, the share price of Arch Capital is up 30.4% in the same period. Yup, that’s 3x! Such outperformance is a sign of more to come.
In addition, its share price has been explosive.
A pullback could be near, providing a fantastic opportunity to buy it for a swing trade.
What’s the price area I’m watching for an entry?
Continue reading to get the details.
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Performance Of US Stock Market vs Arch Captial (ACGL)
There are 2 critical bits of information that you can get from the comparison chart above.
Can you tell what they are?
Yes, they are price trend and relative performance.
#1 Price Trend
You’ll want to trade with the price trend to increase your profitability.
Arch Capital’s share price is clearly in an uptrend. This can be inferred from its rising performance.
Knowing this, you’ll want to be on the lookout for buying opportunities.
#2 Relative Performance
How does the performance of Arch Capital’s shares compare to the S&P 500?
When compared (as shown in the comparison chart above), its performance easily outshines and beats the S&P 500’s hands down.
Why is this critical?
A stronger-performing stock is more likely to continue bringing greater-than-market returns, making your trade worthwhile.
Having passed the 1st round of analysis, let’s continue analyzing the shares of Arch Capital.
How Explosive Is Arch Captial (ACGL)?
Because you’re looking to buy and hold this stock for a few days to weeks, you’ll want it to explode upwards in price. This will reduce your opportunity cost.
So, have the share price of Arch Capital’s shares been capable of exploding upwards?
I’ve marked out the upmoves its shares have demonstrated since Jul 2023.
For a company with a $37.5b market capitalization, the magnitude of its upmoves (between 4.3% and 15.9%) is considered explosive!
Its latest upmove measures 5.3%, and the share price of Arch Capital could continue rising for a while more.
So, should you be looking to buy its shares for a swing trade now?
Key Price Levels
Here, we will discover whether the time to buy its shares for a swing trade is ripe.
To do that, let’s uncover its key price levels (which is also known as support and resistance).
Why is this important?
Support and resistance zones are areas where prices are likely to turn. These zones allow you to buy a stock at a more sensible price. After all, who enjoys overpaying for anything?
I’ve identified a potential support area ~$98. I think there’s a strong chance of Arch Capital’s share price dropping to ~$98 in the coming days before bouncing higher.
I’m eagerly waiting for this to happen for a chance of swing trading its shares.
Please note that this is for educational purposes. You’re highly encouraged to 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?
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!
