Money has got to go somewhere.
After a hot running streak since Nov 2022, the overall Chinese stock market is coming down. This includes the Hong Kong stock market.
So, if money is leaving the Chinese stock market, where is it going to?
Yup, the US stock market.
Ok, but the US stock market is enormous!
Instead of spending hours searching for stocks, I’ve done the hard work for you.
I’ve come up with a list of the top 30 strongest stocks in the US. It’s yours for FREE!
Just promise me that you’ll watch this recording which Marketwise Asia has generously extended to get the full context.
Before proceeding to this week’s swing trading opportunity, shall we have a short recap on last week’s swing trading opportunity: Las Vegas Sands?
According to The Art of Explosive Profits (AEP) framework, there was a buy entry.
Though the share price of Las Vegas Sands hasn’t exploded yet, I encourage you to give it some time. Allow your stop loss and take profit levels to work for you.
Perfect! You’re now ready to uncover this week’s swing trading opportunity: Paramount Global.
Performance Of US Stock Market vs Paramount Global (PARA)
Adopting the Top-Down approach, you’ll compare the overall stock market with the stock in examination.
Hence, let’s analyze the US stock market that’s represented by the S&P 500 futures 1st.
From the chart of the S&P 500 futures above, the S&P 500 futures has been on a mighty uptrend since mid-Oct 2022. A deep pullback occurred in mid-Dec 2022, before the value of the S&P 500 futures exploded.
This is normal market behavior, so let’s zoom in and look at its performance last week.
The S&P 500 futures started the week with the bears in charge, before the bulls stepped in, and finally conceded ground to the bears once again.
However, the S&P 500 futures was up by 1.7% overall. Not bad!
Is the performance of Paramount Global’s shares comparable to the S&P 500 futures’?
Source: paramount.com
Paramount Global’s shares started to trend higher in mid-Nov 2022, 1 month later than the S&P 500 futures.
Similar to the S&P 500 futures, shares of Paramount Global had a deep pullback in mid-Dec 2022.
Here comes something different.
Its share price shot up with just 1 shallow pullback.
Last week, its shares recorded a 7.9% jump!
This 7.9% jump beats the 1.7% rally by the S&P 500 futures hands down.
Ok, now you’ve established that Paramount Global’s shares have been outperforming the S&P 500 futures for a while now.
What’s the next layer of examination?
Its explosiveness in price.
How Explosive Is Paramount Global (PARA)?
This is probably the most important part of the analysis.
If the stock you’re considering hasn’t exhibited explosive price movements, you’ll be wasting precious time and money.
Here, all the up moves by the shares of Paramount Global have been marked and measured.
With its 13 up moves measuring between 5.3% and 29.8%, do you consider the 13 up moves explosive?
Absolutely!
This is especially so when you consider its market capitalization of $16.1b!
I know that you’re excited. I am too!
You’ll need to uncover its key price levels to determine whether this is the right time to enter for its next explosive move.
Key Price Levels
You are convinced that the shares of Paramount Global is a superb candidate for a swing trade.
Now, it’s time to uncover its key price levels to see if the time for a swing trade is here.
Yes, key price levels are also known as support and resistance zones. These zones tell you whether there’s any demand and supply ahead.
Looking at the chart above, you can see that there’s an immediate support zone ~$23.50 and an immediate resistance zone ~$26.
Currently, the share price of Paramount Global is $24.60. This is right between its support and resistance zones.
What does this mean?
Time is on our side. Be patient and wait for its price to fall to ~$23.50 before considering buying for a swing trade.
I think that its latest up move is overextended too.
The Strategy You Can Use To Swing Trade Paramount Global (PARA)
After comparing the performance of PARA with the broader US stock market, determining whether PARA has experienced explosive up moves, and identifying its key price levels, it’s time to talk strategy.
To stay in business, you must know your entry, profit taking, and stop loss levels in every trading strategy. Yes, trading is a business, which means that your strategy must be well thought out.
Using The Art of Explosive Profits (AEP) framework, I’d like to see PARA pullback to around $23.50 before considering an entry for a swing trade.
As the name implies, you’ll be looking to consistently catch an explosive move in a short period of time.
Instead of relying on news and hearsay, the AEP course will teach you how to screen stocks for swing trading like PARA.
You’ll also learn how to read charts and identify stocks that are about to make a big move.
Finally, you’ll learn how to identify the optimal entry, stop loss, and take profit levels to capitalize on these explosive moves (in a safe manner, of course)!
Can you apply the AEP framework to provide you with a side income while working full time?
Yes, you can!
Come, have a look at the AEP framework and incorporate this explosive trading strategy to your arsenal to capitalize on more swing trading opportunities.
Why Is Swing Trading PARA Worth It?
Source: cbs.com/shows/fbi
The S&P 500 futures has been on the rise. Instead of merely rising alongside the S&P 500 futures, PARA outperformed it magnificently.
Furthermore, PARA has enjoyed 13 explosive up moves in the past 6 months alone!
3 of them measure more than 25%!
It has also been proven that buying after a pullback increases your chances of profitability, so I’ll be waiting for PARA to pull back to about $23.50 before entering for a swing trade.
While I await the opportunity, please keep in mind that I’m not a financial advisor, so please treat this as edutainment and conduct your own research.
Lastly, all photos and images are from unsplash.com, pexels.com, pixabay.com, and tradingview.com.
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