Swing trading has been continuously rising in popularity in recent years, and it is an excellent option for beginner traders. The chances of earning a profit regarding such short-term trading are high, as the traders purchase the stock for a few days and sell it once the price increases for a profit.
However, not all stocks are suitable for this type of trading, so choosing the right stocks with the profit potential is very important. Here are some good swing trading stocks to begin trading the right way.
What Is Swing Trading?
Before getting familiar with some good swing trading stocks to make an investment, let’s briefly mention what swing trading actually is.
Swing trading is short-term trading that involves buying and selling stocks when in anticipation of market movement. The traders can implement trading strategies and hold positions overnight, for multiple days, weeks, or longer.
The main objective is to earn a profit from the stock price movements. Even though the profit is small, it can add up to an excellent return. The opportunities for earning a profit are high, but swing trading also comes with risks as well.
Good Swing Trading Stocks
Generally, good swing trading stocks meet requirements such as high volume, stock performance, proven catalysts, adequate volatility and others. The following swing stocks are excellent for trading. However, it is important to remember that market conditions change with time, so it is important to make a decision based on those changes.
Apple (AAPL)
The widely-known tech giant launches many products which affect the stock price, making Apple a good option for swing trading. Last year, the company became a trillion-dollar company, and with such growth and success, there is no surprise traders can take advantage of swing trading opportunities.
As a technology innovator, the company regularly introduces products on the market, such as the latest iPhone and Apple computer. Over the past two years, Apple has reached an amazing stock performance and has a market cap of approximately $2.4 trillion. This means many opportunities for swing traders.
To earn a profit, it is necessary to monitor Apple’s announcements and watch the stock prices, including technical indicators and fundamentals, for the right timing.
Facebook (FB)
Facebook, from Meta Platforms, Inc., is another good choice for swing trading. Social media platforms have become a necessity in today's day and age, and as a result, the company has made revenue growth and grown its net income.
With a market cap of $943 billion, Facebook’s stock has grown tremendously in the last year. Given that over 28.7 million shares were bought and sold, the stock for FB is liquid, and you can easily find buyers and sell your position if the price drops.
Microsoft (MSFT)
The revolutionary high-tech company has a revenue of over $168 billion. In 2022, around 37.2 million Microsoft shares were purchased and sold on a daily basis. Hence, investors can make opportunities out of the stock's rise from this American software company.
Since its massive revenue, as a trader, you can anticipate that the company will continue its growth pattern while you determine when it is the ideal time to start buying and selling points regularly.
Netflix (NFLX)
Netflix’s stock rose 53% last year, providing its users with the latest movies and TV shows. During the pandemic, Netflix has generated more than $1.9 billion and is expected to continue in the same pattern, making it a good option for swing traders.
Amazon (AMZN)
Amazon welcomes millions of customers daily, contributing to the company’s longevity in the market. This company has a lot of growth potential in the following years, meaning that Amazon is an incredible swing trade option as well.
PayPal (PYPL)
Given that digital payments are the future, PayPal is another excellent option for swing traders. The platform enables mobile and online payments and serves around 43 million accounts. The market cap of PayPal currently stands at $85 billion.
Starbucks Corporation (SBUX)
The popular coffee chain can also be a very profitable swing trade. Starbucks has significant markets in the USA and China and remains a good investment option for traders. Revenues for Starbucks rose 3.1% to $8.4 billion over the same period in the previous year, and the company expects an earning growth between 15%-20% over the next three years.
Caterpillar (CAT)
This construction equipment manufacturer produces a broad range of equipment. Caterpillar operates under several business segments, such as energy, transportation, and resource industries. The company has a market cap of $87 billion and facilitates over 2 million shares traded daily, showing high liquidity.
Salesforce (CRM)
The tech company specializing in cloud computing has a market cap of around $250 billion. This software company has detected significant revenue growth and is expected to do so the following year as well.
Kohl’s (KSS)
The department store retailer has over 1,000 stores across the US. It features around 14 million share trades on a daily basis. Kohl’s has a high beta and over 15% short interest, which makes it an excellent swing trading option.
Advanced Micro Devices, Inc. (AMD)
This is a global company that specializes in producing flash memories, graphics processors and other devices used for computer processing. The company operates in two business segments and has a market capitalization of over $141 billion. Advanced Micro Devices reported a 99% increase in revenue over the years and has recorded revenue of $6.7 billion.
How to Trade in Swing Share Trades
To begin swing trading, you need to find a reliable online broker offering a variety of global markets and open an account. Then, you will need to select the stocks you are considering buying and view the share price chart.
Make sure to look for a high volume and volatility and make an investment. Moreover, trading services such as FoolProof Options can assist you to stay on the right side of the market and guide you through the whole trading process.
For only $97 a month, the veterans of FoolProof will provide you with a trading plan, and the service will give you a couple of alerts throughout the week. There is also a 14-day free trial, so you can try out how it works before spending any money.
Conclusion
Swing trading can be a very profitable side hustle, during which the traders can earn a substantial profit if their market forecast is correct. Successful traders implement different strategies to earn a profit, choosing shares that have common profitable characteristics. In this post, we have mentioned several good swing trading stocks to choose from, as the companies have shown great potential and are expected to perform well in the future.