Stock Swing Trades to keep an eye on, based on strong trending movement or consolidations that could breakout. Stocks mentioned: $S $EXTR
I don’t want these articles to be viewed as trade signals, but rather a learning device. There is a lot more to trading than just buying at price A and selling at price B. There is risk management, position sizing, trading psychology (sticking to a plan, etc), being aware of earnings, different order types, and stop loss and target levels that are based on the stock’s specific movements.
Sprint (S)
Strong uptrend over the last year. The price has consolidated in a triangle pattern above the 40% retracement level (there is nothing important about that particular level, just that it is within the entry area I look for).
There are two options here. Buy near the bottom of the triangle, and that trade produces about a 4.3:1 reward to risk ratio. The other option is the more classic technical analysis approach: waiting for a breakout. The breakout trade results in a reward:risk of about 2:1 (a bit less).
You will also notice an indicator on the chart called an ATR Stops. That can be used as a trailing stop loss. If the price closes below the ATR Stops level, then place an actual stop loss a couple cents below that close (if long).
Since a lot of people ask about trailing stop losses, this is an option I have been testing that seems to work quite well. A stop loss is also placed when the trade is initially taken, just in case the price drops right away before moving favorably.
Note that sprint has earnings in a couple weeks, so may want to hold off until after that. Unfortunately that happens a lot around this time of year.
To use these new charts, click the full screen button, and then click full screen again to come back and continue reading. Click the “Play” button to see how the price action unfolds after the chart has been published. Fancy!
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