In a flash, we are in mid Dec! This means that Christmas is barely 20 days away.
How will you be celebrating Christmas?
I’d had my 1st Christmas celebration over the weekend. We had lots of food, drinks, games, prizes, and laughter. We enjoyed each other’s company.
Most importantly, we came together as a trading community to give back to society.
The Singapore Para Powerlifting community was selected for its athletes’ tenacity. They didn’t allow their physical condition to hold them back from living a full life. You guys are a strong source of inspiration!
Returning to the markets, the Fed has just reduced interest rates by 25 basis points (or 0.25%). This was good news because it aligned with market expectations.
Before you enter the market with all guns blazing (you might not want to do so anyway), let’s review last week’s #PowerStocks pick: Teradyne (TER).
Review Of Last Week’s Pick Of The Week
Teradyne (TER) was last week’s stock pick.
It develops and sells test systems for semiconductors and robotics, a cornerstone participant in the AI race.
Having risen more than 32% in 17 days, I was anticipating a pullback.
I waited all week before it finally came on Fri.
Am I still looking to buy its shares for an explosive swing trade?
Yes.
Where am I looking to take profit if this trade turns out as planned?
Head over to my Telegram Channel to find out!
Speaking of Telegram, my team and I will never ask you for your hard-earned money for “investments”.
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 Dollar Tree (DLTR) Worth It?
Source: dollartree.com
Dollar Tree is a massive discount store with stores in the US and Canada.
With a market capitalization of over $26b, Dollar Tree is among the largest retailers in the world.
Despite this mammoth market capitalization, its shares are explosive, rising 23 times over the past 11 months, with each move ranging from 5.1% to 24.8%.
Having risen over 20% in less than 2 weeks, a pullback could be on its way.
What’s my game plan?
Where’s a favorable price area I’m watching 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 Dollar Tree (DLTR)
The very 1st thing I want to know is the trend of Dollar Tree’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 strong uptrend. Hence, I’d like to find an opportunity to buy its shares.
What’s next?
I’ll compare the performance of Dollar Tree’s 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 return that exceeds the market’s. So, I’ll refer to the comparison chart above again.
While the S&P 500 has risen 3.7% in the past 3 months, the shares of Dollar Tree have risen 33.2%, or almost 9x more!
This outperformance is highly welcomed, and I’m all ready to buy its shares for an explosive swing trade.
But, am I missing anything?
How Explosive Is Dollar Tree (DLTR)?
Yes, it’s premature to buy the shares of Dollar Tree just yet.
Because I aim to buy its shares and ride its next upmove instead of going through the ups and downs, my holding period will be approximately a week or 2. Therefore, I want its shares to have the ability to explode upwards.
Have the shares of Dollar Tree been exploding upwards consistently?
Marking out the explosive upmoves for the past 11 months has left me stunned.
There are 23 explosive upmoves, and each of them measures between 5.1% and 24.8%!
This is made even more impressive when I discovered the size of Dollar Tree.
Dollar Tree enjoys a huge market capitalization of over $26b!
For the shares of a company of this size to consistently explode upwards between 5.1% and 24.8% is mind-blowing!
Additionally, I appreciate that Dollar Tree 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 Dollar Tree for an explosive swing trade?
Key Price Levels
Timing is crucial for many things in life. This includes stock trading and investing.
Have you bought an explosive stock without checking whether the time is ripe?
How did it turn out?
Chances are, you suffered significant losses and emotional distress.
Because you lost confidence and doubted yourself, you missed the next fantastic trading opportunity when it arose straight from under your nose!
That’s not what I want, so I’m going to uncover the key price levels of Dollar Tree’s shares.
Yes, key price levels are also known as support and resistance zones. I’ve also marked out its support area in the chart above.
After rising 20.5% in under 2 weeks, I smell a pullback happening soon.
I anticipate that the shares of Dollar Tree will pull back to around $120.50 before rising again.
Therefore, I’m waiting for the scenario mentioned above to take place before buying its shares on the bounce (off $120.50) 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.
Claim Your Free (Limited Time) Stock Course Right Now:
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.
Click on the banner below to claim your stock course for free (limited time) now!
