BJ’s Wholesale Club: #PowerStocks Series Pick Of The Week (March 2025)

Phew! The US managed to avert a government shutdown just hours before the deadline. Although the US had faced a government shutdown, it's not a pretty sight. The next deadline is September 2025, giving the US time to figure out another solution. In the past few weeks, many defensive stocks have been enjoying the time of their lives. However, the share price of these defensive stocks have pulled back in the past few days, and I think that they could resume rising soon. Before I share about this week's #PowerStocks pick, let's review last week's: Colgate-Palmolive (CL).

Review Of Last Week's Pick Of The Week

Colgate-Palmolive (CL) was last week's stock pick. It's a Consumer Staples stock that provides oral hygiene products and more. After sharing about this stock, it rose for a day more before pulling back. I was delighted because I'd been waiting for this pullback. But this pullback didn't turn out the way I'd anticipated. The pullback brought its share price below its support zone. This effectively meant that there was no trade. And I'm glad to have saved my hard-earned money! 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.

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Why Is Swing Trading BJ's Wholesale Club (BJ) Worth It?

Source: investors.bjs.com/home/default.aspx

BJ's Wholesale Club operates membership warehouse clubs. In its clubs, you'll find products related to grocery, household and pet, electronics, furniture, health, and beauty, to name a few. Due to the nature of its business, BJ's Wholesale Club's stock can be classified as defensive. Defensive stocks have performed exceptionally well recently. While the S&P 500 declined 6.8% in the last 3 months, the shares of BJ's Wholesale Club shot up 11.8% higher! Its shares have got this interesting characteristic - predictable explosiveness. After exploding higher by more than 20% and pulling back, the time to buy its shares for an explosive swing trade could be here. What's the price area I'm watching? 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 BJ's Wholesale Club (BJ)

With over 6,000 stocks to trade in the US alone, how do I filter for suitable candidates for a swing trade? I begin by looking for stocks that are in an uptrend because we are still in a secular bull market. Doing so increases my chances of profitability. Looking at the chart above, can you easily tell that the share price of BJ's Wholesale Club is in a strong uptrend? Next, I'll compare the performance of the candidate against the S&P 500. Why? When the stock I'm considering is stronger than the market, this signifies strength. And when an object is in motion, it's likely to continue in that direction until the circumstances change. Shall we refer to the chart above again? While the S&P 500 (represented by the black line) declined by 6.8% in the last 3 months, the shares of BJ's Wholesale Club rose by an incredible 11.8%! Such outperformance is reassuring because I want to reap a higher return than the market's. BJ's Wholesale Club's shares are worthy of further analysis.

How Explosive Is BJ's Wholesale Club (BJ)?

Does this stock have the ability to provide me with a return that's higher than the market's in a short amount of time? That calls for an examination of the explosivity of the shares of BJ's Wholesale Club. I've marked out the explosive up moves its shares have made in the past 11 months. There are a total of 15 impressive explosive up moves, with each measuring between 5% and 20.5%! What's more impressive? BJ's Wholesale Club is no small company. It enjoys a big market capitalization of over $14 billion! Its big market capitalization has not hindered the ability of its shares to explode in a short amount of time. Consistently! In addition, I love that it enjoys a big market capitalization because its shares will be less prone to manipulation. This adds another layer of security to my hard-earned money. Here comes the million-dollar question: Is it time to buy its shares for an explosive swing trade?

Key Price Levels

Let's answer the question by uncovering its key price level. This is a critical step because this key price level is also known as a support zone. Support zones are price areas where the stock may drop to before heading higher. Thus, I don't wish to grossly overpay when I buy the shares of BJ's Wholesale Club for a short-term explosive trade. Referring to the chart above, I've identified a support zone at around $107. Did you notice that its share price has dipped to its support zone? Its share price looks poised to rise from here. Yes, I think that its shares are ripe for an explosive swing trade! I'll be sending my order. Let's see how this trade turns out.

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.

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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. Click on the banner below to claim your stock course for free (limited time) now!