On Fri, we got reminded of who’s in charge of global stock markets.
President Donald Trump suggested a 50% tariff on the European Union, causing the S&P 500 futures to fall as much as 1.7% in an hour.
With President Donald Trump leading the US, we should expect more volatility and sudden moves in the stock market.
Did this sudden drop in the market affect last week’s #PowerStock pick of the week – Cameco (CCJ)?
Let’s find out!
Review Of Last Week’s Pick Of The Week
Cameco (CCJ) was last week’s stock pick.
It’s 1 of the world’s largest uranium fuel providers, supporting nuclear power plants and the defense industry.
After rising by more than 17% in 8 days, its shares began pulling back. I saw a fantastic explosive swing trading opportunity emerging and waited for a bounce around $50.
This bounce came on Mon, and its share price soared, reaching my take profit level of around $56.
That’s a wild 8.4% gain in a matter of days!
Because volatility is expected to increase in the coming days, I strongly encourage you to practice the habit of taking profit before your open profit gets reduced sharply.
I’ve also shared this in my Telegram Channel.
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Why Is Swing Trading Mosaic (MOS) Worth It?
Source: mosaicco.com
Mosaic is the world’s 5th largest fertilizer company by market capitalization and belongs to the Materials sector.
Its fertilizers are supplied to many countries worldwide, such as Argentina, Brazil, Canada, China, and Japan, to name a few.
I’d chucked this stock aside for a long time because of its underperformance and declining share price. But I was alerted to it via my Swim Trading AI Bot.
A closer look revealed that its shares have shot up by over 54% in recent weeks, significantly outperforming the S&P 500.
Better yet, I smell a pullback, telling me that a fabulous swing trading opportunity is emerging.
What’s the price area I’m waiting for before buying the shares of Mosaic?
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 Mosaic (MOS)
Mar and early Apr were tough for the shares of Mosaic. Since then, its shares have rebounded strongly, flying upwards in a relatively straight line!
This strong uptrend tells me that the market is optimistic about its shares. Hence, I should look for a buying opportunity because this would increase my chances of profitability.
There’s something else that I can uncover from the comparison chart above.
Yes, it’s the relative performance of Mosaic’s shares against the overall market (S&P 500).
A comparison is performed to filter the overperformers to reduce my opportunity cost of time and money.
So, how did Mosaic’s shares stack up against the S&P 500 in the last 3 months?
The S&P 500 suffered a decline of 3% due to the rise in uncertainty. On the other hand, the shares of Mosaic shot up by more than 38%!
Such an outperformance has left me awe-struck.
Is there more to analyze before deciding to buy its shares?
How Explosive Is Mosaic (MOS)?
Another consideration is the explosiveness of its shares.
I’d like to buy shares, hold them for several days to weeks, and capture huge upmoves. Hence, the stock I buy needs to be explosive to make my trading capital work hard for me.
Do Mosaic’s shares fulfil this requirement?
In the past 11 months, the shares of Mosaic have burst upwards 21 times.
What’s more remarkable is the magnitude of these upmoves. Each of them measures between 4.8% and 36.9%!
For a company that enjoys a big market capitalization of over $11b, such upmoves are mind-blowing.
Companies that enjoy a big market capitalization are attractive to me because it’s tough to manipulate their shares. This adds a layer of assurance to my hard-earned trading capital.
I can’t wait to buy the shares of Mosaic!
Key Price Levels
Hang on! There’s another consideration to determine whether I should buy its shares now.
After all, no one likes losing money.
To help bring the chances of profitability to my side, I wouldn’t want to chase and buy its shares now. Instead, I’d wait for the stock’s price to reach the key price levels I have in mind.
Did you also identify the same key price level (aka support and resistance) at around $33.50?
At the area of $33.50, Mosaic’s shares tend to turn.
Therefore, I wouldn’t want to buy its shares now. Instead, I will wait for its share price to dip to around $33.50 and bounce. This is a more favorable price to buy its shares for an explosive swing trade, increasing my chances of success.
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.
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?
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