A couple of countries have struck a trade deal with the US last week.
India and the UK are among the first few countries. Which country will be next?
Will we see a meaningful trade deal between the US and China? Everyone is watching this with bated breath.
If a meaningful deal isn’t struck soon, I think that we could see the US stock market retreat a little. This is because the US stock market has been on a tear for the past 3 weeks.
And this is good news, providing traders with swing trading opportunities!
Before I share about my findings for this week’s #PowerStocks pick, let’s review the stock shared last week: Zscaler (ZS).
Review Of Last Week’s Pick Of The Week
Zscaler was last week’s stock pick.
It’s a huge cybersecurity firm, and belongs to the Technology sector.
After an eye-popping rise of 20%, its shares are finally pulling back.
I’ve been waiting for this pullback for a week!
Where am I expecting its share price to pull back till and bounce?
I expect its share price to fall to around $224 before rising. And it’s my game plan to buy them for an explosive swing trade then.
Switching to another important topic. I’ve been alerted about Telegram groups impersonating me or Swim Trading.
Please note that 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 SAP (SAP) Worth It?
Source: sap.com/sea
SAP is a technology company that provides businesses with application software and software-related services.
Its services are used by the world’s largest businesses, including Accenture, Nestle, and even Germany’s largest football club, FC Bayern Munich.
Things got more exciting when I had a peek at the chart showing its share price.
The shares of SAP have burst upwards in price repeatedly in the last 11 months.
After soaring by 22% in 2 weeks, its share price is beginning to pull back.
But I’m not going to buy its shares at its current price.
What’s the price area I’m waiting for?
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 SAP (SAP)
Was SAP’s share price affected by Liberation Day in the US?
SAP’s share price slid on Liberation Day, but quickly found its footing a few days later.
From mid-Apr, its share price has been climbing, forming a new uptrend. Market participants love this stock!
Knowing that SAP’s shares are in an uptrend, I’ll want to look for a buying opportunity because this will increase my odds of success.
However, I’m not satisfied with a return. I’m looking for a potentially higher return than the market’s. So, I want to discover whether the performance of SAP’s shares is better than that of the S&P 500.
Referring to the comparison chart above, have the shares of SAP outperformed the S&P 500?
Yes, they have!
While the S&P 500 has slid 6% in the past 3 months, the share price of SAP has soared 5.1%!
Such an outperformance is welcomed!
And I look forward to buy its shares for a swing (short-term) trade.
But, there’s more to analyze.
How Explosive Is SAP (SAP)?
Because I intend to buy and hold the shares of SAP for the short-term, I want its shares to be explosive.
So, I’ve marked out the upmoves that the shares of SAP have made in the past 11 months.
I love what I see.
In the past 11 months, there have been 20 huge upmoves made by the shares of SAP. And each of them measures between 4.2% and 22.2%.
Things got even wilder when I learnt of its market capitalization – $345b.
For its shares to enjoy this mega market capitalization and the magnitude of its upmoves, I want to buy its shares.
Here’s another plus point: the shares of companies that enjoy a massive market capitalization are less prone to manipulation, adding a layer of assurance to my hard-earned trading capital.
I’m drooling.
Should I buy its shares for a swing trade now?
Key Price Levels
Before plonking my trading capital into the shares of SAP, I would like to know whether the time for a swing trade is here.
After all, no one likes losing money.
I shall uncover its key price level (aka support and resistance) to help me determine whether the time to buy its shares for a swing trade is ripe.
After more than a decade of trading the US stock market, I’ve realized the need to be disciplined. Instead of chasing stocks, I’d wait for the stock’s price to reach the key price levels I have in mind.
Did you also identify the same price level at around $288?
The share price of SAP tends to turn around $288. Therefore, I’d like to wait for it to fall to this price area and bounce before I buy its shares for an explosive swing trade.
This approach has saved my students and I from countless heartaches.
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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