Ever since the trade war between the US and China reignited, global markets have been thrown into a topsy-turvy state.
In the US, the stock market is down 1 moment and up the next. The bulls and bears are having the fight of their lives, and there’s no clear winner in the days ahead, especially when the US government is still in a shutdown for 18 days with no end in sight.
This reminds me of a pop song, “Every Other Time” by LFO.
Sometimes she’s wrongSometimes I’m rightSometimes we talk about and we figure it outBut then she just changes her mindSometimes she’s hotSometimes I’m coldSometimes my head wants to explode
Given this stalemate between the bulls and bears in the US stock market, should I be looking for buying or shorting opportunities?
I’m still looking to buy stocks because the market is still in a major uptrend. But, I’m going to be extra selective due to the increased volatility.
Before I analyze this week’s stock pick, let’s review last week’s #PowerStocks pick: Eversource Energy (ES).
Review Of Last Week’s Pick Of The Week
Eversource Energy (ES) was last week’s stock pick.
It’s the world’s top 25 largest Utilities companies, enjoying an enormous market capitalization of over $26b.
I was anticipating the pullback to end at its support area around $71. Its shares fell to slightly below $71 as the spat between the US and China worsened.
Immediately after that, its share price rose as expected.
The share price of Eversource Energy fell and threatened to test $71 again. I struggled. Thankfully, it rose on Fri, and I’m looking to sell it once it reaches my target price.
What’s my target price?
Head over to my Telegram Channel to find out!
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Why Is Swing Trading BridgeBio (BBIO) Worth It?
Source: investor.bridgebio.com/events-and-presentations
BridgeBio focuses on medicines that treat Mendelian diseases.
The company ranks in the top 100 list of the largest biotech companies by market capitalization in the world. It enjoys a respectable market capitalization of over $10b.
While the shares of some large-cap companies suffer from lethargy, BridgeBio’s shares tend to explode upwards consistently — each of its explosive upmoves measures between 5.3% and 42%.
After rising by 18% in slightly over 2 weeks, its shares are pulling back.
This could be the perfect moment to buy its shares and capture 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 BridgeBio (BBIO)
The very 1st thing I want to know is the trend of BridgeBio’s 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 5.8% over the past 3 months, the shares of BridgeBio have risen nearly 17.5%! That’s a 3x 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 BridgeBio (BBIO)?
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 BridgeBio been able to explode upwards consistently?
Marking out the explosive upmoves for the past 11 months has left me stunned.
There are 21 explosive upmoves, with each measuring between 5.3% and 42%!
I got more excited when I discovered the size of BridgeBio.
This company enjoys a large market capitalization of over $10b! This ranks BridgeBio among the world’s 100 largest biotech companies.
Additionally, I appreciate that BridgeBio 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 BridgeBio 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 BridgeBio 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 rising 18% in just over 2 weeks, a pullback is here.
The shares of BridgeBio have pulled back to its support zone of around $54 and bounced.
Therefore, I can’t wait to buy its shares on Mon and 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.
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