After a steep drop of over 21% in 1.5 months, a Tweet sent the S&P 500 up by 10.5% in a single day.
Yes, you read that right.
10.5% in 1 day.
President Donald Trump is back at the things he loves doing.
Are you bullish on the US stock market?
I’m cautiously bullish.
While I’m bullish, I anticipate more crazy bearish moves at the same time. Therefore, I will still play defensively by entering a smaller position and being more stringent with my stock selections.
Did last week’s #PowerStocks pick, Ollie’s Bargain Outlet (OLLI), turn out to be a winning trade?
Let’s review it.
Review Of Last Week’s Pick Of The Week
Ollie’s Bargain Outlet (OLLI) was last week’s stock pick.
It’s a discount store that sells housewares, food, books and stationery, bed and bath, floor coverings, and more.
Fear engulfed the market.
Even when President Donald Trump announced a pause in the reciprocal tariffs for all countries except China, stocks of many day-to-day retailers and grocers got hit.
The shares of Ollie’s Bargain Outlet weren’t spared.
Ollie’s Bargain Outlet’s share price crashed through its support area of around $109, and sank a further 7%.
However, because I had my trade plan, I’m aware of the price area where I’d be willing to buy its shares and the reasons for doing so. This saved me from agony.
What else will you not want to enter?
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Why Is Swing Trading Dollar General (DG) Worth It?
Source: dollargeneral.com
Dollar General is a discount store that sells food, snacks, health and beauty aids, cleaning supplies, basic apparel, and more. Thus, it belongs to the Consumer Staples sector.
In times of great uncertainty, defensive stocks (such as Consumer Staples stocks) tend to perform well.
While the market slumped 7.9% in the last 3 months, the shares of Dollar General defied gravity with a meteoric rise of over 24%!
The trade war initiated by President Donald Trump couldn’t stop its shares!
Dollar General’s shares have pulled back recently, giving traders like me a golden opportunity to buy its shares to catch its next burst upwards.
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 Dollar General (DG)
Optimism is returning to the stock market, but I anticipate a bumpy ride ahead. Hence, I’m looking to buy stocks that are in a strong uptrend to increase my chances of profitability.
From the chart above, can you tell that the share price of Dollar General is in a mighty uptrend?
I’m excited to look for a buying opportunity! By looking for a buying opportunity in an uptrend, I increase my chances of success. I’m excited!
But buying any stock that’s in an uptrend may not work well. The stock in question ought to outperform the stock market so that I can potentially make a larger-than-market return from buying its shares.
Looking at the comparison chart above again, can you tell that the shares of Dollar General have been flying high against the S&P 500?
While the S&P 500 had dropped 7.9% in the last 3 months, Dollar General’s shares had risen by over 24% instead!
Such a powerful outperformance makes me drool.
But before I hit that Buy button on my trading platform, there’s more to be analyzed to bring the chances of profitability to my side.
How Explosive Is Dollar General (DG)?
Before I check out the explosivity of Dollar General’s shares, I would like to know whether this stock is prone to market manipulation.
One of the simplest ways is to uncover its market capitalization.
A listed company that enjoys a huge market capilization is also preferred because it would be a lot more difficult for its shares to be manipulated.
Dollar General enjoys a massive market capitalization of over $19b, making its shares safer to trade. This is assuring as I don’t wish to lose my money to a fraud.
But, can the shares of this $19b company explode upwards in price consistently?
To answer this, I’ve marked out all its explosive upmoves in the past 11 months.
There are a total of 18 explosive upmoves, with each of them measuring between 4.2% and 30.4%!
There’s good money to be made if I can catch its next burst upwards!
But, is it time to buy its shares for an explosive swing trade now?
Key Price Levels
It’s painful to lose money.
After more than a decade of trading the US stock market, I’ve realized the need to be disciplined. Instead of chasing stocks, I’d wait for the stock’s price to reach the key price levels I have in mind.
These key price levels are also known as support and resistance.
So, it’s time to uncover the support area of Dollar General’s shares and determine whether it’s a good time to buy them for an explosive swing trade.
Did you also uncover its support area around $86.50?
This is the price area in which its share price is likely to fall to before heading higher.
Yes, its share price has bounced from its support area of $86.50!
With this revelation, I want to buy its shares for an explosive swing trade now (barring any negative releases, of course)!
This approach has saved my students and I from countless heartaches.
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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