Stock Swing Trades to keep an eye on, based on strong trending movement and the price finding support after a pullback. Stocks mentioned: $PM $APO $CENX ($ARNC) $TTMI
There is a lot more to trading than just buying at price A and selling at price B. There is risk management, position sizing, trading psychology (sticking to a plan, etc), being aware of earnings, different order types, and stop loss and target levels that are based on the stock’s specific movements. Practice in a demo account until you have proven yourself consistently profitable with the approach. Only then should any real capital be risked.
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.
The stock market swing trading course will be expanded in the next few months, and I will be sending out 3 or 4 new videos (free) to everyone who has purchased the course. These videos are in response to the most common questions people ask.
The new videos will look at:
–Another screening method for finding explosive stocks. We still need to do some digging and wait for the right setups, but I think a lot of people will find this method of screening easier …and more fun! It also opens up a few variations on entries.
–I will introduce another entry method that allows for a bit more confirmation. This means you are less likely to get stopped out by tiny moves against you. The biggest problem I see is a lack of patience getting into trades (hence the stop getting triggered before the big move). This alternate entry method requires more patience, which means many of you will end up taking a lot better trades.
–With the above entry technique, another position sizing method may work better for many people. You can choose between this new position sizing method (a bit simpler, while still controlling risk) or the method in the current course. Both are good.
–The most common question I get asked is about trailing stop losses. In the new videos, I will show you a trailing stop loss technique that has been working great. A trailing stop takes the pressure off in terms of picking a target/profitable exit. And, of course, with the trailing stop loss, you don’t need to worry about watching a big winner turn into a loser.
SO, if you have had these types of questions, so have others. I like to trade a certain way, but I also want to give you some options, so you can find the best trading method for you.
Be sure to check out the stock swing trading articles I write every week or two on VantagePointTrading.com (scroll down the homepage and you will see them). These articles provide a bit of an intro to these new concepts, as well as provide slight variations on the strategies you already know.
The following stocks swing trades were found using Finviz.
Criteria: Average Volume>400K or 500K, 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. [last week I also added in: Go to the Technical tab and set 52-Week High/Low=0-10% Below High…as this zeroes in on really strong stocks that have pulled back off their highs only marginally (not crashed)].
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.
Charts provided by TradingView.
Phillip Morris (PM): This trade occurred right after I wrote the last article on May 3. PM would have already hit a 2:1 target, or is still underway if using a trailing stop loss or a higher target. Our consolidation was a bit higher than the absolute low of the pullback, but overall there was lots of strength, a strong rally off the second drop and then we saw ascending lows after that second drop (April 20) which was nice to see.
Apollo Global (APO): Consolidating throughout May after a strong trend. Prior consolidations, over the last 8 months, have often lasted about 1 month. First pulled back in early May, and had a second little pullback (slightly lower low–which is nice because it flushes out all the weak longs and only the strong buyers remain) into May 19. The consolidation was very short-lived–only a couple days–so this was more of an advanced trade, but we already had support established near $26 and if we are assuming the uptrend will continue it is unlikely the price would fall back to the prior support level at $25. So this one would have been ok to take even though the consolidation was a bit smaller than we typically look for.
TTM Technologies (TTMI): Strong uptrend but has been moving sideways for awhile. Slightly higher lows recently, and just broke out of a small consolidation near support. Looking for that uptrend to continue, eventually. The longer a range lasts though, the more problematic it can be to place a stop loss. The safest place to put it is below all the range lows. This reduces the reward:risk of the trade, but has less chance of being stopped out. Putting a stop loss just below the most recent small consolidation will produce a higher reward:risk, but there is an elevated chance of being stopped out on a small move lower. Because of the range (which could continue), I like the trailing stop loss on this one…it will quite possibly reduce the loss or produce a tiny profit if the range continues (and a potential big profit if we get a big upside move).
Century Aluminum (CENX) or ARNC: Both had strong rallies at the start of the year, then pulled back in March. Since then the price has been forming a rounded bottom, and we are starting to make short-term higher-highs and higher-lows since April. I like the movement in CENX better than ARNC. The long-term trend is up, but we are in a pullback that has lasted some time, and we are now starting to transition back to the upside. Early May produced a nice pullback and consolidation, which provided a possible entry. If we get another strong pop, we can once again look for a pullback and consolidation like we saw in late April and early May. So no trade here at the moment (unless you are in from before), but one to keep an eye on in case a setup develops again.
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. Unless expressly stated, I don’t have positions in the stocks mentioned..they are just examples for educational purposes (as there are many trade setups out there to choose from).