The March school holidays have just ended.
Did you travel and catch a moment of rest?
I didn’t have the chance to take a break with my family during the March school holidays, so I’m looking forward to the school holidays in June.
I think that there’ll be more delicious short-term trading opportunities in the months leading up to June.
And I’ve spotted 1 of them.
But before I share my #PowerStocks of the week, let’s review last week’s pick of the week – BJ’s Wholesale Club (BJ).
Review Of Last Week’s Pick Of The Week
BJ’s Wholesale Club (BJ) was last week’s stock pick.
It’s a defensive stock because of the nature of its business – membership warehouse clubs that sell products related to grocery, household and pet, electronics, furniture, health, and more.
In my analysis, I’d shared that I expect its share price to rise. And it did so immediately!
Where am I looking to take profit at?
I’ve shared this in my Telegram Channel.
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.
A list of our official communication channels can be found here.
Why Is Swing Trading Chubb (CB) Worth It?
Source: chubb.com/sg-en
Chubb is in the Financials sector.
It provides a wide range of insurance coverage and services to individuals and companies, ranging from property to life insurance.
If you’ve been following the market closely, insurance stocks have been performing impressively while many other stocks are floundering.
While the S&P 500 slid, the share price of Chubb soared by nearly 6% in the last 3 months!
Furthermore, its shares movement is predictable and explosive in nature, bringing consistent gains to traders.
After rising for more than 5%, its shares are pulling back. I smell a fantastic swing trading opportunity emerging.
What’s the price area I’m watching?
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 Chubb (CB)
How do you filter for stocks to trade when there are more than 6,000 stocks in the US market?
I filter for stocks that are in a strong uptrend.
Why?
The S&P 500 is still in a bull market. By following the trend, I increase my chance of profitability.
Can you easily tell that Chubb’s share price is in a strong uptrend based on the chart above?
Great!
To increase my chances of profitability even more, I’d like to find out whether Chubb’s shares are enjoying stronger momentum.
I’m going to refer to the chart above again.
While the S&P 500 (represented by the black line) declined by 5.1% in the last 3 months, the shares of Chubb rose by an eye-popping 5.8%!
Such outperformance is reassuring because I want to reap a higher return than the market’s.
Chubb’s shares are worthy of further analysis.
How Explosive Is Chubb (CB)?
Being an international company that enjoys a massive market capitalization of more than $116b, can its shares provide me with a higher-than-market return in a short amount of time?
Join me as I examine the explosivity of Chubb’s shares.
I’ve marked out the explosive up moves its shares have made in the past 11 months.
What I discovered was mind-blowing.
Its shares have jumped upwards 14 times, with each measuring between 4% and 9%!
For a $116b company, its massive market capitalization has not hindered the ability of its shares to explode in a short amount of time. Consistently!
Why do I love looking at stocks with a big market capitalization?
These stocks add a layer of security to my hard-earned money as they will be less prone to market manipulation.
Should I buy its shares for an explosive swing trade now?
Let’s find out in the next section.
Key Price Levels
How will I know whether this is the time to buy the shares of Chubb for an explosive swing trade?
By uncovering its key price level.
This key price level is also known as its support zone. Support zones are price areas where its shares may drop to before rising explosively.
Therefore, I don’t want to overpay for Chubb’s shares for a short-term explosive trade.
Looking at the chart above, I’ve spotted a support zone around $292.
I’ve also noticed that its share price has dropped to its support zone!
What does this mean?
The shares of Chubb could rise explosively from here!
I’ll be sending in my order tonight if its share price can rise above $292. Wish me the best of luck!
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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