President Trump is at his favorite game again.
In summary, the US is going to impose a 100% tariff on China, over and above any tariffs they are currently paying, and export controls on all critical software to China. This will come into effect on 1 Nov or earlier.
His social media post on Fri night sent the markets into a rapid, steep drop. The futures of the S&P 500, Nasdaq, and Dow Jones lost 2.7%, 3.5%, and 1.9% respectively.
It’s little wonder Technology and Industrials stocks suffered a bloodbath, falling as much as 9%.
In contrast, stocks in the Consumer Staples and Utilities were resilient, rising as much as 3.7%!
Imagine seeing your trading portfolio in the green…
As uncertainty returns to the market, we will be facing increased volatility after a smooth sailing few months. With this in mind, I think that this Utilities stock could perform.
But before I share about my findings, let’s review last week’s #PowerStocks pick: L3Harris (LHX).
Review Of Last Week’s Pick Of The Week
L3Harris (LHX) was last week’s stock pick.
It’s 1 of the world’s largest defense contractors, and it’s powering the Golden Dome for the US.
As it was pulling back, I’d anticipated its shares to dip below $295 before bouncing. However, the share price of L3Harris flew.
Then this happened.
President Trump’s social media post sent L3Harris shares tumbling below $295.
Am I still looking to buy its shares for an explosive swing trade?
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Why Is Swing Trading Eversource Energy (ES) Worth It?
Source: eversource.com
Eversource Energy is a huge utilities company that supplies natural gas, electricity, and water to many parts of the US.
With a market capitalization of over $26b, this ranks Eversource Energy among the top 25 largest utilities companies in the world.
Despite this mammoth market capitalization, its shares are explosive, rising 21 times over the past 11 months, with each move ranging from 4.7% to 12.8%.
After rising by 8.7% in recent weeks, a pullback is happening.
This could be the perfect moment to buy its shares and capture its next explosive 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 Eversource Energy (ES)
The very 1st thing I want to know is the trend of Eversource Energy’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 Eversource Energy’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 4.3% in the past 3 months, the shares of Eversource Energy have risen 9.4%, or 2.1x 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 Eversource Energy (ES)?
Yes, it’s premature to buy the shares of Eversource Energy 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 Eversource Energy been exploding upwards consistently?
Marking out the explosive upmoves for the past 11 months has left me stunned.
There are 21 explosive upmoves, and each of them measures between 4.7% and 12.8%!
This is made even more impressive when I discovered the size of Eversource Energy.
Eversource Energy enjoys a huge market capitalization of over $26b!
For the shares of a company of this size to consistently explode upwards between 4.7% and 12.8% is mind-blowing!
Additionally, I appreciate that Eversource Energy 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 Eversource Energy for an explosive swing trade?
Key Price Levels
Timing is crucial for many things in life. This includes stock trading and investing.
Buying an explosive 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!
So, is there a way to tell whether the time to buy the shares of Eversource Energy is here?
Yes!
You can do so by uncovering its key price levels (also known as support and resistance zones). And that’s what I’ve done in the chart above.
After rising 8.7%, a pullback is here.
What am I anticipating?
I anticipate that the shares of Eversource Energy will continue to fall a little further to around $71 before rising again.
Therefore, I’m waiting for the scenario mentioned above to take place before buying its shares on the bounce (off $71) 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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Worse still, ~80% of traders lose money.
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