The S&P 500 has been making new all-time highs almost every day!
However, not every stock is loved by the bulls.
Stocks like Apple (AAPL), Alphabet (GOOGL), Amazon (AMZN), and Tesla (TSLA) are struggling. They are a distance away from their all-time high; the bulls seem to have left them out.
Not this stock.
Before I share about this week’s #PowerStocks pick, let’s review last week’s – Northern Trust (NTRS).
Review Of Last Week’s Pick Of The Week
Northern Trust was last week’s stock pick.
It’s an investment bank that serves corporations, family offices, insurance companies, sovereign entities, and other institutional clients.
After rising 22.2% over 2 weeks, I sensed that a pullback was near.
Little did I know that the pullback would begin immediately!
Last week, the share price of Northern Trust slid more than 7% to reach its support area of $124 before closing slightly higher.
Is there an update to my game plan for Northern Trust?
Head over to my Telegram Channel to find out!
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Why Is Swing Trading Core & Main (CNM) Worth It?
Source: coreandmain.com
Core & Main distributes water, wastewater, storm drainage, and fire protection products. The company also provides infrastructure solutions in the US.
It’s no small company, boasting a huge market capitalization of over $12b.
I’d expected its shares to be sluggish, but I was proven wrong. Its shares have been highly explosive, rising 21 times in the past 11 months!
After rising by 13.8% in 3 weeks, a pullback is finally here. This could present a fantastic swing trading opportunity, and I’d like to catch its next 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 Core & Main (CNM)
Is the price of Core & Main’s shares rising?
Yes!
In the past 3 months, its shares have been rising strongly.
By following the trend of its shares, I increase my chances of profitability.
Therefore, I’ll want to look for a buying opportunity.
To further increase my chances of profitability, I’ll compare the relative performance of the US stock market to the shares of Core & Main.
Why?
I seek to achieve a return that exceeds the market.
Referring to the comparison chart above, which has been performing better in the past 3 months?
While the S&P 500 has risen 16.7%, the shares of Core & Main have risen over 26%, outperforming the S&P 500 by nearly 10 percentage points!
I’m more awake now.
Are there more things to consider and analyze?
How Explosive Is Core & Main (CNM)?
As a swing trader, I aim to buy and hold this stock for just a couple of days or weeks. Therefore, I want the shares I’m buying to experience explosive upmoves.
Have the shares of Core & Main consistently exploded upwards multiple times?
I’ve marked its upmoves and I love what I see.
Over the past 11 months, the shares of Core & Main have exploded upwards 21 times, with each measuring between 5% and 37.1%!
This is remarkable given that Core & Main enjoys a huge market capitalization of over $12b. Typically, the upward movements of such large companies tend to be slow and gradual. Not for Core & Main!
I appreciate that it enjoys a huge market capitalization, as this provides an additional 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 Core & Main for an explosive swing trade?
Key Price Levels
The right action at the wrong time is the wrong thing to do.
Similarly, buying a 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!
Timing is important.
How do I tell whether the time to buy the shares of Core & Main is here?
I can do so by identifying its key price levels (also known as support and resistance zones) because prices tend to turn at these levels.
Let’s identify a support zone from the chart of Core & Main above.
Did you identify a support zone at around $60?
That’s where I believe its share price would pull back to before rising again.
Thus, I’ll be watching for a pullback to around $60 and a bounce before buying its shares 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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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.
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