March 27

Pick Of The Week – Analysis On Fastenal Company (Week 13, 2022)

A gust of wind blew as I was walking down a street. Oh my, it’s freezing cold.

It was winter in Europe and though I was well wrapped in my winter clothes and gloves, that wind reached my bones.

I looked around and saw a queue.

Being Singaporean, I joined the queue of a coffee shop thinking they served fantastic coffee.

After a few minutes of observation, I realized that people were buying coffee to keep themselves warm!

As the West emerges from the chilly weather, more outdoor work and services resume, leading to a higher demand in the construction and machinery industries.

Is there a stock which belongs in both industries? YES!

So, let’s analyze Fastenal Company (FAST) right away!

Performance Of US Stock Market vs Fastenal Company

Comparing the S&P 500 futures against FAST, you’ll notice that the price of S&P 500 futures was up last week while the price of FAST was pretty much stagnant (shown by the gray box).

Does this mean that FAST is weaker than the market?

Looking at the past 6 months (Oct 21 to Mar 22), you can see that the price movement of the S&P 500 futures is more controlled while the price movement of FAST is more explosive.

Do you notice that the up and down trends in FAST are more pronounced? This makes FAST a suitable candidate for an explosive swing trade.

How Explosive Is FAST?

How explosive can FAST be as it’s in 2 non-glamorous industries – construction and machinery?


Let’s see how explosive each up move of FAST has been in the past 5 months.

In the past 5 months alone, FAST has experienced 5 huge bullish moves. They range between 6.5 and 11.25%!

This is no easy feat because FAST has a huge market capitalization of $33.1b!

Before you send an order to your broker, let’s identify the key price levels of FAST, shall we?

Key Price Levels

The next step after determining that a stock has been explosive is to plot out its key price levels, aka support and resistance levels. As always, support and resistance levels are more like zones.

These price levels are important as you can infer the psychology of the market’s participants. Support levels are where prices are highly likely to bounce off while resistance levels are where prices are highly to be rejected at.

In the case of FAST, you can see that its price is above a key price level at $57.50. $57.50 used to be an area of resistance as the price of FAST got rejected at that level in early Feb 22.

The same price level is now a support level, as the price of FAST is seen to be holding up above $57.50.

Above $57.50 is a resistance level at $61 while below it is a support level at $55.50. 

Having identified these 3 important price levels,  it’s time to plan for your entry and exit.

The Strategy You Can Use To Trade FAST

I’ve spent time analyzing the S&P 500 futures to have a sense of the overall US stock market before diving in to FAST. This is to provide you with an added edge. 

Now, you’ve finally arrived at the part on strategy where you’ll be planning your entry, profit taking, and stop loss levels. 

In every trading strategy, you must know your entry, profit taking, and stop loss level to stay in business. Yes, trading is a business indicating that the strategy you use must be well formulated too. 

Using The Art of Explosive Profits framework (AEP for short), I’d want the support level of $57.50 to hold well. I’d also want the price of FAST to head higher within next week, forming another explosive up move! 

As its name suggests, you’ll be looking to catch an explosive move in a short period of time consistently. 

In the AEP course, you’ll be coached on how to search for strong stocks like FAST instead of relying on news and hear-say.

You’ll also become fluent in reading charts to shortlist stocks that are about to have an explosive move.

Finally, you’ll learn how to identify the optimized entry, stop loss, and take profit level to capture these explosive moves that you’ve been waiting for (in a safe manner, of course)! 

Have a look at the AEP and add this explosive trading strategy to your arsenal to seize more trading opportunities.

Why Is FAST The Stock Pick Of The Week?

FAST is the stock pick of the week because it’s a strong stock with huge explosive moves. Each up move measures at 6.5% or more! This suits the AEP framework perfectly, allowing you to capture sizable gains in a short period of time safely. 

A fresh uptrend has been sighted on the chart of FAST, strengthening your chance of success. 

Spring is almost over and the rising temperature in the West increases the demand for the FAST’s products and services.

However, you’ll need to know that I’m not a financial advisor, so please treat this article as education. Have fun conducting your research and I’d love to hear your thoughts in our Facebook Group

Here’s What You Can Do To Improve Your Trading Right Now:

#1 Join us in our Facebook Group as we can discuss the various ways of applying this by clicking here

#2 Never miss another market update; get it delivered to you via Telegram by clicking here

#3 Grab a front row seat and discover how you can expand your trading arsenal in our FREE courses (for a limited time only) by clicking here

Trade safe!

Here Are The Articles That Might Interest You

Loved this? Spread the word

Join Swim Trading Trade Discussion Facebook Group

Our supportive online community is the best place to learn together with others just like you.