Flowserve: #PowerStocks Series Pick Of The Week (January 2025)

Headlines of retrenchment and restructuring continue to grip headlines. Meta Platforms plans to reduce its headcount by 5%, while Citigroup aims to eliminate 20,000 jobs by the end of 2026. Despite the recent layoffs, the labor market in the US remains tight, and the unemployment rate remains low. I believe that the stock market will remain bullish, so I'm still looking to buy stocks for an explosive swing trade. Before I reveal my plan for this week's stock pick, shall we review last week's #PowerStocks pick: Dutch Bros (BROS)?

Review Of Last Week's Pick Of The Week

Dutch Bros (BROS) was last week's stock pick. The company sells coffee and simple confectionery in the US. As soon as the stock was shared on Mon, its shares pulled back to $55 according to plan. The next day, its shares bounced off $55 and flew almost 6%! Despite an explosive upmove of 6% in a single day, its shares continued shooting higher, eventually reaching $61, as pointed out in this Telegram message. In short, the shares of Dutch Bros exploded by 7.9% in just 4 short days! Boy, I love this trade. 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 Flowserve (FLS) Worth It?

Source: flowserve.com

Flowserve is an industrial machinery company that manufactures and sells aftermarket flow control systems. Its products are used in various industries - energy, mining, and flood prevention. Over the past 2 years, its share price has been creeping up silently. In the recent 3 months, its share performance has shone against the S&P 500 as well. The share performance of Flowserve beats that of the S&P 500 by almost 6x! Furthermore, its share price has proven to be explosive, consistently bringing higher returns than the market. As its share price surges 10.5%, 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 Flowserve (FLS)

What can you infer from the blue line representing Flowserve's share performance (FLS)? The share price of Flowserve was stagnant between Nov and Dec 2024 before a strong uptrend emerged. Because my chances of profiting from the market increase when I follow the trend, I will be looking for an opportunity to buy the shares of Flowserve for an explosive swing trade. Referring to the chart above once again, let's compare the performance of the S&P 500 against that of Flowserve. While the S&P 500 rose by 2.6% in the past 3 months, the shares of Flowserve rose by almost 16%! That's a super outperformance of nearly 6x! Because I like what I'm seeing, I shall continue analyzing the shares of Flowserve.

How Explosive Is Flowserve (FLS)?

I'm about to discover whether Flowserve's shares are explosive enough to be worthy of my time and money. In the past 11 months, the share price of Flowserve has flown upwards 18 times, with each measuring between 4.1% and 19.1%! I'm excited to learn that Flowserve enjoys a large market capitalization of $8.3 billion! The sheer size of its market capitalization makes it much less likely for its shares to be manipulated, which gives me a comforting sense of security. Does this mean that the shares of Flowserve are ready for an explosive swing trade?

Key Price Levels

Is it possible to know when a good time is to buy its shares for an explosive swing trade? How? This can be achieved by uncovering Flowserve's key price level, which I've done in the chart above. $61.50 is an important price level often referred to as support and resistance. This suggests that there's a good possibility that the share price will dip to around $61.50 before making a comeback. Yes, I won't want to buy its shares now. Instead, I'll wait patiently for its share price to reverse to around $61.50 and bounce 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.

Claim Your Free (Limited Time) Stock Course Right Now:

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!