Have you been paying attention to Chinese technology stocks?
No, I’m not referring to Alibaba as its share price is still ranging.
There are a couple of Chinese stocks listed in the US stock market that are trending higher despite the crackdown on technology companies in China.
Just before I share this stock and my findings, shall we have a look at last week’s swing trading opportunity?
Match’s share price has bounced from its support at ~$44.80 and an entry appeared last week too!
However, please be more careful as it will be announcing its earnings on 1 Aug. Earnings are well-known to be unpredictable, so you have to decide whether you’re willing to brace the volatility that’s ahead.
With the review of Match completed, let’s look ahead to this week’s swing trading opportunity: PDD.
Performance Of US Stock Market vs PDD (PDD)
How has the stock in examination performed against the S&P 500 for the past few months?
This is an important check.
You’re looking for alpha returns.
If the stock you’re examining underperforms the S&P 500, you’re better off buying the S&P 500 ETF instead.
PDD underperformed for periods of time before performing top from mid-July 2023.
You can tell 1 more thing from this comparison: PDD is in a strong uptrend.
Therefore, you’ll be more inclined to look out for buying opportunities.
How Explosive Is PDD (PDD)?
PDD has been climbing in the background when all attention was given to the US technology stocks.
While climbing, PDD has experienced 14 explosive up moves in the past 8 months, with each measuring 5.9% and larger! Its largest up move measures 30.2%!
In fact, there’s 1 more explosive up move that’s still going strong.
Its up moves are astounding as PDD, at $118b, is the world’s 133th largest company by market capitalization! Such huge up moves are usually confined to stocks with a much smaller market capitalization, making them more prone to manipulation.
This is also significant because you’re looking for a swing trading opportunity which is worthwhile of your time.
Key Price Levels
At this stage of you analysis, you’ll want to uncover PDD’s key price levels.
These key price levels are also known as support and resistance zones, where its share price is likely to turn at.
You can easily tell that there’s an immediate support zone at ~$82 and a resistance zone at ~$91 from the chart above.
This means that there’s probably just a little more headroom that PDD could rise to before dropping.
And PDD’s share price could find support at ~$82 before rising.
Is it therefore a good time to buy PDD’s shares for a swing trade now?
I’d be waiting for its shares to fall to ~$82 before deciding to take action.
It’s also worth noting that Match will be announcing its earnings results on 24 Aug 2023, so please trade with more care closer to the date.
The Strategy You Can Use To Swing Trade PDD (PDD)
After comparing the performance of PDD with the broader US stock market, determining whether PDD has experienced explosive up moves, and identifying its key price levels, it’s time to talk strategy.
To stay in business, you must know your entry, profit taking, and stop loss levels in every trading strategy. Yes, trading is a business, which means that your strategy must be well thought out.
Using The Art of Explosive Profits (AEP) framework, I’d like to see PDD pullback and bounce from $82 before considering an entry for a swing trade.
As the name implies, you’ll be looking to consistently catch an explosive move in a short period of time.
Instead of relying on news and hearsay, the AEP course will teach you how to screen stocks for swing trading like PDD.
You’ll also learn how to read charts and identify stocks that are about to make a big move.
Finally, you’ll learn how to identify the optimal entry, stop loss, and take profit levels to capitalize on these explosive moves (in a safe manner, of course)!
Can you apply the AEP framework to provide you with a side income while working full time?
Yes, you can!
Come, have a look at the AEP framework and incorporate this explosive trading strategy into your arsenal to capitalize on more swing trading opportunities.
Why Is Swing Trading PDD Worth It?
PDD has been rising silently, outperforming the S&P 500.
With the bulls favoring this stock without the spotlight, it makes sense for you and I to pay attention to it.
In addition, its shares have proven to be explosive, rising as much as 30.2% in a matter of days!
While we wait for the setup, please keep in mind that I’m not a financial advisor, so please treat this as edutainment and conduct your own research.
Lastly, all images are from pexels.com, pixabay.com, sectorspdrs.com, tradingview.com, and unsplash.com.
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