Fairy lights and other bright lights are on full display.
Large Christmas trees stand tall in front of malls and offices.
Melodious jingles are played inside.
The festive season is here!
Do you find that the festive mood is more cheerful this year?
I feel so, maybe because the stock market is recovering from a long-awaited pullback (albeit it took longer than expected).
As we enjoy this season with your loved ones and friends, let’s also count our blessings.
What are you thankful for?
I’m thankful for the new and deeper friendships forged this year, good health, and the trading opportunities in the market every single week.
While the market resumes its climb, I have my eyes set on this Materials stock. But before I share my findings, let’s discover how the stocks shared in November performed.
- Universal Health Services: No entry
- Cardinal Health: No entry
- Sphere Entertainment: 4.8%
- Walmart: 4.1% and counting
November started off on the wrong foot.
The S&P 500 slid 5% over 3 weeks with heightened volatility before rising sharply to end the month 0.2% higher.
While the S&P 500 was pulling back, I’ve shared 4 stocks that could potentially soar.
I was waiting for a pullback in Universal Health Services’ and Cardinal Health’s shares. But it never came. Both stocks continued their solid performance without taking a break.
Thankfully, my trade plan for Sphere Entertainment’s and Walmart’s shares came to pass, delivering an average return of 4.4% compared to the S&P 500’s 0.2%.
The trade on Walmart’s shares is still ongoing. Are there any changes to my trade plan?
Let’s find out in the next section.
Review Of Last Week’s Pick Of The Week
Walmart (WMT) was last week’s stock pick.
It’s the world’s largest chain retailer.
A pullback was forming after an 8.5% rise in just 3 days.
I had my price alert set at $106 because if Walmart’s shares could clear this key price level, it would signal strength.
The bulls returned from a short rest, sending Walmart’s shares above $106 on Tue. Since then, its shares have soared higher, rising by over 4.1% in just 3 days.
With such a clean and explosive move, I’m looking to take profit soon.
Where am I looking to take profit at?
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 Steel Dynamics (STLD) Worth It?
Source: steeldynamics.com
Steel Dynamics produces steel and recycles metal.
It boasts a huge market capitalization of over $24b, ranking it among the world’s 5 largest steel companies.
Unlike many large companies whose shares exhibit lethargic price movement, the shares of Steel Dynamics are highly active, consistently surging.
In just the past 11 months, its shares have surged upwards 28 times, each measuring between 5.2% and 19.9%!
Furthermore, Steel Dynamics’ share performance is over 5x that of the S&P 500.
I’m waiting for a pullback before I buy its shares.
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 Steel Dynamics (STLD)
What do I want to find out at the start?
The trend of Steel Dynamics’ share price (in blue).
Knowing the trend of its shares allows me to determine whether I’ll be looking for a buying or shorting opportunity because following its price trend will sharply increase my chances of profitability.
Looking at the chart above, its shares are in a strong uptrend. Hence, I’d like to find an opportunity to buy its shares.
What’s next?
I’ll compare its share performance against the S&P 500 (in black).
Why?
I want my hard-earned money to work hard for me. A stronger-performing stock is likely to continue bringing a larger-than-market return. So, I’ll have another look at the comparison chart above.
While the S&P 500 has risen 5.3% in the past 3 months, the shares of Steel Dynamics have risen over 27.5%! That’s more than a 5x outperformance!
I want to buy its shares for an explosive swing trade.
Should I do just that now?
How Explosive Is Steel Dynamics (STLD)?
No! I shouldn’t buy its shares without conducting a deeper analysis.
Because I aim to ride its shares for its next burst upwards (I don’t want to hold its shares through a pullback or reversal), 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 Steel Dynamics been able to explode upwards consistently?
Marking out the explosive bursts in the past 11 months left my eyes wide open.
In just the past 11 months, its shares have burst upwards 28 times, each measuring between 5.2% and 19.9%!
When I found out about Steel Dynamics’ market capitalization, my eyes widened.
This company enjoys a huge market capitalization of over $24b! The shares of large companies don’t usually enjoy large bursts in price, but Steel Dynamics is different.
Additionally, I appreciate that Steel Dynamics enjoys an enormous 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 Steel Dynamics for an explosive swing trade?
Key Price Levels
Timing is crucial for many things in life. This includes stock trading and investing.
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!
Is there a way to tell whether the time to buy the shares of Steel Dynamics is here?
Fortunately, yes!
You can do so by uncovering its key price levels (also known as support and resistance zones). And that’s what I’ve done in the chart above.
Having identified a support area around $162.50, what’s my game plan?
I think that the shares of Steel Dynamics will soon pull back to around $162.50.
Therefore, I’m waiting for the shares of Steel Dynamics to pull back to and bounce off the price area around $162.50 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.
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