Where did the holidays go?
Why does time have to pass so fast?
If you have the same questions as I do, don’t worry. January is a short month because of the upcoming Lunar New Year.
Shopping malls and shops have swapped their Christmas decorations and playlists for the Lunar New Year.
While the Chinese stock market will be closed, the US stock market will remain open, and I sense an explosive swing trading opportunity.
Before I share my trading plan, let’s review last week’s #PowerStocks pick: Workiva (WK).
Review Of Last Week’s Pick Of The Week
Workiva (WK) was last week’s stock pick.
It’s a technology company that offers cloud-based compliance and regulatory reporting solutions for the energy and finance industries.
After a huge upmove of 19.6%, its share price began to pull back.
A support zone at around $105 was identified, and I’m still waiting for its share price to fall to that price area and bounce before buying it for an explosive swing.
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Why Is Swing Trading CyberArk (CYBR) Worth It?
Source: cyberark.com
CyberArk is a technology company that provides cybersecurity solutions. Its products serve the banking, insurance, and healthcare industries.
With more data stored online, the need for cybersecurity is ever-present. This is also reflected in its rising share price.
Its share price bears a distinctive pattern – frequent upward bursts in price of between 4.9% and 26.4%. It’s no wonder its shares performance outpaces the S&P 500 by 5x!
After rising for 9.9%, a pullback could be here, presenting a fantastic opportunity for an explosive swing trade.
Which price area am I waiting for?
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 CyberArk (CYBR)
CyberArk is a cybersecurity firm. Is the market optimistic about its prospects?
This can be inferred from the trend of its share price.
Referring to the chart above, can you tell that its share price is in a strong uptrend?
Because its share price is in an uptrend, it enjoys bullish momentum. So, I’ll want to look for a buying opportunity to increase my chances of profitability.
To further increase my chances of profitability, I’ll want the shares of CyberArk to outperform the S&P 500 in the past 3 months.
Looking at the chart above again, it’s clear that CyberArk’s share performance significantly outperforms the S&P 500!
While the S&P 500 had risen by only 4.2% in the last 3 months, the shares of CyberArk had risen by more than 21%. That’s an impressive 5x outperformance!
I’m getting more excited.
How Explosive Is CyberArk (CYBR)?
To prevent myself from buying this stock out of FOMO (fear of missing out), I’m holding my horses by further analyzing the shares of CyberArk.
I will count and measure the up moves its shares have made to determine whether its shares are explosive enough to consider swing trading on.
In the past 11 months, CyberArk’s shares have burst upwards in price 13 times! Each upward burst measures between 4.9% and 26.4%.
Considering this company enjoys a market capitalization of over $16b, this is a remarkable feat!
Here’s a little insight: I love trading shares of companies with a market capitalization of several billion because their shares are difficult to manipulate, offering an extra layer of security.
Now, I’m convinced that buying the shares of CyberArk for an explosive swing trade is a good idea. But 1 question lingers: Is it time to buy its shares?
Key Price Levels
Identifying the key price levels of CyberArk’s shares will be beneficial in answering that question.
Key price levels are also known as support and resistance, price areas where its shares could turn.
Did you also spot a support area at around $330?
That’s where I will want to buy its shares after a bounce. In the meantime, I’ll be waiting patiently.
Here’s a pro tip: Instead of staring at your screen, you may want to set a price alert on your broker’s platform to be notified so that you can spend precious time with your loved ones.
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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Worse still, ~80% of traders lose money.
This is because trading isn’t just about skill alone.
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But what if I told you that you could quickly gain control over your emotions of fear and greed and master the stock market?
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