Recent Swing Trade Strategy Examples (KEM, COHR, UCTT, NVMI)
Some very recent swing trades, based on strong up trends and the ‘trending swing trade strategy’ which looks to capitalize by buying during pullbacks. Stocks mentioned: $KEM $COHR $UCTT $NVMI
For further guidance on swing trading, see the Stock Market Swing Trading Video Course. Some of the stocks mentioned are a variation of the strategies discussed in the course, and I will explain how those variations work in the examples below.
With summer in full bloom, time is at a premium as I try to be outside and traveling as much as possible. Hence the lack of “stock trading stocks” articles recently. The last article was published on May 24. All those trades worked out very well, regardless of whether a profit target or a trailing stop loss method was used (I will be discussing trailing stop losses in the new videos I am adding to the Stock Market Swing Trading Course–the new videos will be emailed in late August to everyone who has purchased the course). While it is nice to get a bunch of wins in a row, that is not the norm. Most great swing traders win about 50% or 65% of their trades, their wins are just much bigger than their losses. Some great traders only win 30% of the time…but their gains are huge compared to their losses. So if you do have some losses, don’t sweat it. Keep the risk on each trade low relative to your account balance, take trades with good reward:risk ratios and the odds should eventually work in your favor (with a good entry and exit method).
The following stocks swing trades were found using Finviz.
Criteria: Average Volume>300K (prefer 500K+, but if a great setup has a bit lower liquidity I won’t dismiss it), Industry=Stocks Only. Hit the Performance Button, sort by Perf Half or Perf Year (descending). Click the Charts button to view the results in chart format. The three stocks below were top performers over the last 6 months, so you wouldn’t have had to spend very long going through results to find these setups…they were all pretty close to the top of the search results.
I quickly ran through some of the other screens covered in the Swing Trading Course and noticed a few setups there as well (not discussed below), so there are still a good number of quality opportunities out there in the US markets.
Charts provided by TradingView.
Recent Swing Trades Underway
Kemet Corp. (KEM) – This stock is on the radar because it is has produced nice winning trades in the past (discussed in prior articles). At first glance this may not appear like a trend trade, because the price has been ranging since May. But there are a couple big reasons why this was still a great long. First, it is in an overall uptrend and is one of strongest stocks in the last 6 months. The price has been ranging recently, but that range is taking place within a longer-term uptrend. There hasn’t been a major drop that signaled this uptrend is over. Second, on June 23 there was a nice false breakout below the 2 prior swing lows, but the price quickly recovered and closed above those swings low (if the price had kept falling that would have been a reversal, but the fact it didn’t tells you something). If you are biased long and a false breakout occurs at support, and then you get a valid entry (in this case we had a consolidation in our buy area–based on the rally from April into May/June–and then a breakout to the upside of that consolidation), it is usually worth taking.
Entry near $13.22 and stop loss near $12.55 (could also be below the major low of $11.73). 2:1 target already reached, and still moving up if looking for more. If looking for more, the price is coming into a resistance area just below $15 (it has peaked there twice, not only once like most trend trades we typically take), so if it can’t break to the upside, it could head back lower. Don’t let this trade turn into a loser after a reasonable target has already been achieved.
Coherent (COHR) – Been on an absolute upside tear over the last year. Nice consolidation (late June early July) and an upside breakout from that consolidation right in the buy zone. Was the first valid buy signal in the pullback. Entry near $230.29 and stop loss below $219 (would want to give this one a dollar or two extra). Looking to exit near the former high (shown), with a more aggressive target near $275 (higher reward:risk).
Trailing stop losses work well on high momentum stocks like this, so I am looking forward to showing you how to do that when the new swing trading videos are released. Note that volume is a bit lower on this one, coming in at just under 400K.
Ultra Clean Holdings (UCTT) – This one just triggered three days ago. Long-term uptrend but had a sharp selloff in early June. Based on the principles of velocity and magnitude, it is typically best to let the next trade signal pass by after a sharp selloff like that (even if you did want to trade the first consolidation, it didn’t trigger). The price does continue to trickle lower and consolidates once again in the buy zone (based on the run higher from April to June).
Entry near $19.41 and target up near the recent high. Even a target near $24.25 (not a bad spot after the relatively large decline) produces a 4:1 reward:risk. Considering a lower target, compared to the typical target which would be placed above the high, is advisable because this recent selloff was the biggest in a couple years. When that happens, it could be the start of a reversal. There is likely still quite a bit of buying pressure in this stock, but given the evidence it may not have the gust after that decline to immediately bounce to new highs. But even if it doesn’t, there is still a good Reward:Risk trade there even if taking profits below the prior high.
Some other recent trades: Nova Measuring (NVMI) triggered a few days ago, although volume is a bit lower on that one. Do you see the setup?
Losing trades WILL happen. Don’t risk more than 1% to 2% of your trading account on a trade (risk = difference between entry price and stop loss price, multiplied by the number of shares). There is always a risk in trading, and you can lose much more than you expect (even when you think you are only risking 1%). Don’t risk real capital unless you know what you are doing, have proven yourself profitable in a demo account, and can financially handle the ups and downs that come with swing trading.
By Cory Mitchell, CMT
Disclosure: This article should not be viewed as investment advice, and is not a recommendation for you to buy or sell. These are trade examples of a specific strategy. Past performance is not necessarily indicative of future performance. These are trade examples for educational purposes (as there are many trade setups out there to choose from), and are not intended to reflect my personal positions or all the trades I currently am in.