After weeks of hot days, are you enjoying the cool and wet weather in Singapore?
It hasn’t rained the whole day for a month or more, and I hope the rain didn’t dampen your plans for the weekend!
Last Sat, I had the honor to share my thoughts about the US stock market under the presidency of President-elect Donald Trump. 2025 should continue to be bullish for the next few months.
With a bullish outlook, I’ll continue looking for stocks to buy for an explosive swing trade.
Shall we review last week’s #PowerStocks pick: CyberArk (CYBR), before I share about this week’s?
Review Of Last Week’s Pick Of The Week
CyberArk (CYBR) was last week’s stock pick.
The company provides cybersecurity solutions for the banking, insurance, and healthcare industries.
Its share price continued to rise before pulling back as expected.
I anticipate this pullback to continue this week, bringing its share price to around $330 where its support area is.
If the share price of CyberArk can bounce off $330, I’ll be keen to buy its shares for an explosive swing trade.
Till that happens, I will be waiting for this to happen.
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Why Is Swing Trading Dutch Bros (BROS) Worth It?
Source: dutchbros.com
Dutch Bros is a coffee chain selling drinks and muffins.
It has been on a massive expansion, bringing the number of outlets in the US to nearly 1,000.
The market has shown a deep appreciation for the company’s efforts, as reflected in an impressive 99% growth in its share price over the past year!
After bursting upwards by 13%, its share price is pulling back. This is good news because an opportunity for an explosive swing trade could be around the corner.
What’s my game plan?
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 Dutch Bros (BROS)
Dutch Bros. is a rapidly expanding coffee chain in the US. Does the market support its expansion plans?
Looking at the trend of its share price in the chart above, it’s clear that the market really loves what the company is doing!
By following the trend of its share price, I increase my chances of profitability. Therefore, I’ll look for an opportunity to buy its shares for an explosive swing trade.
To further increase my chances of profitability, I’m going to compare its performance for the past 3 months to that of the S&P 500.
Referring to the chart above, the S&P 500 has risen by a modest 0.8% while the share price of Dutch Bros has astronomically risen by 86.2%!
Now, that’s a 107x outperformance!
This is unbelievably good, so I’m going to dig further.
How Explosive Is Dutch Bros (BROS)?
Has the share price of Dutch Bros proved to be explosive enough to be worthy of my hard-earned money?
In the past 11 months, the shares of Dutch Bros have exploded upwards 18 times, with each measuring between 6.7% and 52.5%!
Here’s a mind-blowing observation: Since Sept 2024, its shares have exploded upwards mightily, enjoying double-digits growth (except for the upmove in late Dec 2024).
This other bit of information blew my mind.
Dutch Bros enjoys a market capitalization of almost $9b. It’s a massive achievement for its share price to explode this magnitude.
Why do companies that enjoy a market capitalization of billions interest me?
Their shares are much tougher to manipulate, adding a layer of safety to my trading.
I’m convinced that buying the shares of Dutch Bros is a fantastic idea. However, is it time to do so for an explosive swing trade?
Key Price Levels
I’ll uncover its key price level to know whether the time to buy its shares for an explosive swing trade is here.
This key price level is also known as support and resistance, where its share price will likely turn. By uncovering this support and resistance area, I’ll know whether it makes sense for me to buy the shares of Dutch Bros now.
The share price of Dutch Bro looks to have bounced from its support area of around $55. However, I sense that its share price could continue to drop slightly below $55 before rising.
Therefore, I’ll wait for that scenario before buying its shares for an explosive swing trade.
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.
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