What a whirlwind 2 weeks it has been for the US stock market!
One moment, the stock market is up. The next moment within the day, the market is down, and vice versa.
All Magnificent 7 stocks (except Apple and Meta Platforms) have shed value in the last 2 weeks, and have yet to recover.
Are there strong stocks that are about to explode in such a volatile market environment?
Upon some digging, I’ve managed to find this stock.
Before I share my thoughts about it, let’s review last week’s #PowerStocks pick, Greenbrier (GBX).
Review Of Last Week’s Pick Of The Week
Greenbrier (GBX) was last week’s stock pick.
The company designs, manufactures, and sells railroad freight car equipment.
Shortly after sharing about Greenbrier, the stock market was rocked by the news of tariffs being slapped on US’ major trading partners – Canada, Mexico, and no prize for guessing the next one: China.
This caused the shares of Greenbrier to fall below $67, invalidating my trade plan.
In unpredictable and volatile moments, a trade plan becomes more important to save you from unnecessary heartache and second-guessing the market.
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Why Is Swing Trading IBM (IBM) Worth It?
Source: ibm.com/annualreport/assets/downloads/IBM_Annual_Report_2023.pdf
IBM is a technology company involved in AI, cloud computing, financing, and consultation.
Its shares performance has been outstanding in the past 3 months, outperforming the S&P 500 by 20x!
And its shares have burst to life recently while the share price of many of its competitors remains battered.
After a massive 19% rise in its share price, a pullback is here.
Which price area am I waiting for to buy them for an explosive swing trade?
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 IBM (IBM)
Can you tell that the share price of IBM is in an uptrend from the chart above?
Identifying and following the trend are essential as they give you an edge in trading. Therefore, I’ll be on the hunt for buying opportunities.
Let’s have another look at the chart above.
What else can you infer?
The performance of the S&P 500 in the past 3 months is flat, only rising a tiny 0.9%. On the contrary, the performance of IBM’s shares is magnificent! Its shares have risen a remarkable 18%, outperforming the S&P 500 by a jaw-dropping 20x!
I can’t wait to analyze IBM’s shares further!
How Explosive Is IBM (IBM)?
The next step is to discover whether the shares of IBM are worth my time and effort.
I’ve marked out the upbursts of its share price in the chart above.
In just 11 months, IBM’s shares have burst upwards 11 times, with each of these upbursts measuring between 4.5% and 21.1%!
I’m left speechless when I consider its mammoth market capitalization of over $233b.
Market capitalization adds an extra layer of security for my trading capital. Companies with larger market caps are generally more stable and harder to manipulate, which gives me a peace of mind.
The performance of IBM’s shares has got me salivating.
Should I buy them for an explosive swing trade now?
Key Price Levels
After the share price of IBM has shot up by 19% in less than 2 weeks, it is finally pulling back.
Is there a key price level (or support area) that I’m looking at before pulling the trigger to buy its shares for an explosive swing trade?
I think that the price area around $246 could prove to be a support zone.
With that, I’m waiting for its share price to fall to $246 and bounce before buying them for an explosive swing trade.
What about you?
Here’s a pro tip: Instead of staring at your screen, you may want to set 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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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.
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