Have you been betrayed?
That feeling is just so hurtful.
The recent saga of Tokenize Xchange left me with a concoction of emotions - betrayed, hurt, upset, yet glad to have seen the true colors of some people whom I used to consider friends.
I empathize with you if you've funds stuck in Tokenize Xchange.
Through this incident, the adage of not placing all your eggs in 1 basket rings true.
I don't think it's wise to keep all my savings with 1 bank, my trading capital with 1 broker, or only be familiar with 1 trading style, because the market can easily change, leaving me trapped.
As the market pulls back, are there trading opportunities that I'm looking to seize?
Before I share my findings, let's review last week's #PowerStocks pick:
Citigroup (C).
Review Of Last Week's Pick Of The Week
Citigroup (C) was last week's stock pick.
It's a well-established global financial institution and is among the largest in the world.
After rising 12.3% in 2 weeks, I sensed a pullback coming. And it did.
The share price of Citigroup has pulled back way below its support area.
Will I be editing my trading plan?
What do I intend to do?
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 General Dynamics (GD) Worth It?
Source: gd.com
General Dynamics is a huge defense and aerospace company. Like many of its peers, General Dynamics designs, engineers, and manufactures its products and solutions.
Enjoying a massive market capitalization of over $83b, General Dynamics is among the world's largest companies.
While the shares of some mega capitalization companies suffer from lethargy, the shares of General Dynamics tend to explode upwards consistently—each of its explosive upmoves measures between 4.3% and 15.4%.
After rising over 9%, its shares are pulling back.
And I think that a fantastic swing trading opportunity is about to emerge, allowing me to ride 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 General Dynamics (GD)
What's the 1st thing I'd like to analyze from the chart above?
The
price trend of the shares of General Dynamics.
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.
Can you tell that the shares of General Dynamics are in a strong uptrend? Therefore, I'd like to find a buying opportunity.
What's the next step?
I'll compare the performance of General Dynamics' shares against the overall market (or S&P 500).
A comparison will flesh out the stronger performer. If the S&P 500 is the stronger performer, then I wouldn't want to waste my time and money on the shares of General Dynamics because I'm aiming for an outsized return.
So, let's refer to the comparison chart again.
The S&P 500 has been outperforming General Dynamics' shares for over two months, until recently. Ever since late July, the shares of General Dynamics have surged, performing much stronger than the S&P 500.
Here are the statistics:
In the past 3 months, the S&P 500 has risen by 9.7% while the share price of General Dynamics has shot up by 13.8%, outperforming the S&P 500 by nearly 4 percentage points!
Great! I want to buy the shares of General Dynamics.
But are there more points to consider?
How Explosive Is General Dynamics (GD)?
Yes, there are more points to consider before buying its shares for an explosive swing trade.
Since I plan to buy its shares and capitalize on its next upmove, rather than sitting through its fluctuations, my holding period will be around a week or 2. Therefore, I want its shares to have the ability to explode upwards.
Have the shares of General Dynamics been able to explode upwards consistently?
I was left in awe while marking out its explosive upmoves.
General Dynamics enjoys a massive market capitalization of over $83b. Its shares are valued at over $300 each. Yet, its shares have been able to explode upwards 14 times in the past 11 months, with each upmove measuring between 4.3% and 15.4%!
The shares of huge companies are usually more lethargic!
Talking about market capitalization, I love it that General Dynamics enjoys such a massive market capitalization because 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 General Dynamics for an explosive swing trade?
Key Price Levels
As with many things in life, timing matters.
The right thing done at the right time is the best thing that can happen.
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 General Dynamics is here?
Yes!
Here's how I do it - by uncovering the key price levels (also known as
support and resistance zones) of General Dynamics' shares. And that's what I've done in the chart above.
After rising 9.1%, its share price began pulling back.
Where is it likely to fall to before bouncing?
I think that this could happen around $308.
Therefore, I'm waiting for the shares of General Dynamics to pull back to around $308 and bounce before buying them 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!
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