The S&P 500 remains strong, and while there is always a chance of a pullback, it remains a favorable time to be swing trading stocks that are exhibiting overall strength and that are near breakout levels. These breakout levels let us know when the stock could be embarking on its next advance.
Below we’ll look at some stocks that are poised for another potential rally to the upside.
Black Knight (BKI) is approaching the $64.80 resistance area for a fifth time, this time after a false breakout below range support. This all comes after a strong uptrend. If the price breaks above $64.80 the uptrend is likely to continue. One doesn’t necessarily need to wait for a breakout above $64.80. If a consolidation develops just below that level, then a breakout of that small consolidation could also act as an entry signal.
An estimated target is $72 to $73 for this pattern.
BKI has been steadily growing their yearly sales, and significantly increasing profits over the last five years.
Sea (SE) is consolidating near a former high. This stock has been very strong. Typically I like to see the price oscillate a few more times around resistance. This gives the stock a chance to shake out any weak players and coil up (load the spring) for a big move. BKI, above, is a potential example of that. But when a stock is really strong, I am more willing to jump in if a stock breaks resistance on its first attempt. A closing price above $38 in SE would be bullish and signals a continuation of the rise
Due to the strength of the stock—it was up more than 250% at one point in 2019—I would use a trailing stop loss on this one. Don’t want to cut off a winning trade too early.
The company still isn’t profitable, but they do have rapidly expanding sales. With the stock so strong it would seem investors are optimistic that increasing sales will eventually turn into profits.
Live Nation Entertainment (LYV) looks to be approaching a critical juncture. A continued move above $71 and $71.30 signals this corrective phase may be over. There was a violent move lower in early November. That was quickly followed by a sharp reversal back to the upside. It would be really nice to see the stocks oscillate for a while between $71 and $68 (approximately). This would give the stock time to “coil up”.
Utilize a trailing stop loss, or an estimated target near $77 for a shorter-term trade or $85 for a longer-term trade.
This company has been improving its earnings per share and has been steadily increasing sales each year.
Coupa Software (COUP) is up almost 400% since the start of 2018. Since July it has been moving sideways in an expanding range. Since mid-November it has leveled off around $150, with a consolidation high at $155.77. If the price breaks above that consolidation it could break above resistance at $160 as well, setting up the next major advance.
The initial target is $185, with a longer-term target at $210 to $220. A trailing stop loss could also be used.
Coupa has been steadily growing its sales each year, and also improving its earnings—2020 is expected be the year the company moves into profitability.
IQVIA Holdings (IQV) is in a different type of trade setup. The stock has been trending but recently experienced a pullback. The pullback has leveled off near $140. If the price starts transitioning back above $150 then it signals that the pullback is potentially over and the next wave in the uptrend is underway.
A target for the next wave higher is the $170 region.
Sales for this company have steadily grown over the years, although earnings tend to fluctuate up and down.
Final Word on Swing Trading Stocks
The US market is still providing lots of opportunities for swing trades, and many trades are still working out. Our own trading and strategies act as a guide as to when to have our foot on the accelerator or when it is time to back off. When we start to see our breakout trades fail a lot—trigger an entry but then fail to followthrough to the upside, and reverse course to hit our stop loss—we know that conditions aren’t ideal. But when our stock picks are breaking out and advancing strongly we know it is still time to be trading. Keep your finger on the pulse of your own trading, and let it determine when to trade and when to back off.
I’m still finding lots of quality stock trades, but can always change quite quickly. These are trade ideas, and are not recommendations.
Disclaimer: Nothing in this article is personal investment advice, or advice to buy or sell anything. Trading is risky and can result in substantial losses, or even more than you deposited if using leverage.