There’s 1 more week to the summer school holidays.
Where did you bring your family for a time of bonding?
I visited Australia with my family and Alex’s. We had a cool time (literally because it was winter) and soaked up its natural beauty.
On social media, I see many of my friends visiting “the happiest place on earth”. Did you visit Disneyland?
The works of Walt Disney linger in the minds and hearts of many, including myself. After all, I grew up watching Mickey Mouse while the younger generation is more familiar with Elsa.
I could go on and on about Walt Disney.
Instead, let’s find out how our previous #PowerStocks pick fared – Constellation Energy (CEG), before diving into this week’s.
Review Of Last Week’s Pick Of The Week
Constellation Energy (CEG) was our previous stock pick.
It’s the world’s 6th-largest utilities company by market capitalization.
After rising 9.8% in a week, its shares began to pull back, presenting a potentially fantastic swing trading opportunity.
While rubbing my hands in glee, I noted a resistance area at around $308 and had planned to buy its shares at the breakout.
Little did I expect the breakout to occur the next day and for the share price of Constellation Energy to reach my target price another day later! This has brought me a return of 9.5% in just 2 days!
I’ve also shared this in my Telegram Channel.
Speaking of Telegram, I’ve been alerted about Telegram groups impersonating me or Swim Trading.
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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.
To protect you from scams, please note that my team and I WILL NEVER solicit for any investment.
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Why Is Swing Trading CF Industries (CF) Worth It?
Source: cfindustries.com
CF Industries manufactures and distributes fertilizer in North America and Europe.
As a supplier of raw materials, CF Industries belongs to the Materials sector.
Enjoying a large market capitalization of almost $21b, I’m surprised to know that its share price tends to shoot upwards! Over the past 11 months, its shares have shot up 18 times, ranging from 4.9% to 22% each time!
Here’s what interests me the most now: a pullback is underway, presenting me with the opportunity to participate in its next explosive upmove.
What’s the price area I’m waiting for before buying the shares of CF Industries?
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 CF Industries (CF)
Mar was a rough time for stocks, and CF Industries’ shares weren’t spared. Its shares dropped around 10%.
Thankfully, its fate reversed shortly after. Its shares rose fast and hard, forming a powerful uptrend.
Because following the trend helps increase my chances of profitability, I’ll be looking for a buying opportunity.
To further increase my chances of profitability, I’ll compare the performance of CF Industries’ shares against the S&P 500.
Looking at the comparison chart above, which is the stronger performer?
Over the past 3 months, the S&P 500 has risen by 5.3%.
How have the shares of CF Industries performed?
Its shares have soared, rising by over 30% in the same time period!
Knowing that the bulls are pushing the shares of CF Industries harder, I’d like to buy its shares to enjoy a possibly higher-than-market return.
But there’s more to analyze before buying its shares for a short-term swing trade.
How Explosive Is CF Industries (CF)?
In this volatile market environment, I prefer trading for the short term to protect my gains. Therefore, I’d also want the shares I trade to explode upwards in price regularly.
So, how explosive have CF Industries’ shares been? Is it worth my time to buy them for the short term?
Over the past 11 months, the shares of CF Industries have rocketed 18 times!
Each of its upmoves measures between 4.9% and 22%!
This is mind-blowing given that CF Industries enjoys a huge market capitalization of over $20b.
Why is this piece of information so critical?
Firstly, it’s rare to see the shares of such a massive company rise by this magnitude, consistently between 4.9% and 22%.
Secondly, the enormous market capitalization is reassuring. The shares of a company that enjoys a gigantic market capitalization are tough to manipulate, adding a layer of security to my hard-earned capital.
So, is it time to buy the shares of CF Industries for an explosive swing trade?
Key Price Levels
Let’s find out whether the time is ripe to buy the shares of CF Industries for an explosive swing trade. This can be done by uncovering its key price levels (aka support and resistance).
How does identifying its support zone work?
A support zone is a price area where the share price is likely to turn.
Did you also identify a support zone at around $96?
This suggests that the shares of CF Industries could pull back further to around $96 before resuming their upward trend.
With this analysis performed, I further reduce my risk of losing money. No one likes losing money, and I’m no exception.
Instead of rushing to buy its shares for an explosive swing trade, I’d wait for its shares to fall to around $96 and bounce before buying them.
Here’s a pro tip: Instead of staring at your screen, you may want to set 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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