Swing trading is a popular trading strategy that aims to profit from short-term price movements over days to weeks. Swing traders identify stocks that have the potential for significant price swings and use technical analysis tools to optimize entries and exits.
Choosing the right stocks is key to successful swing trading. The best swing trade stocks typically have high volatility and liquidity. This allows traders to capitalize on price movements while still being able to enter and exit positions with ease.
This article explores the top 10 stocks for swing trading based on their recent price performance. Key factors assessed include volatility, volume, liquidity, and technical indicators.
What to Look for in Swing Trade Stocks
When selecting stocks to swing trade, here are some key characteristics to look for:
- Volatility – Swing trading thrives on price fluctuations, so volatile stocks allow for more profit opportunities. Look at historical volatility and average true range.
- Liquidity – Sufficient trading volume and market depth allow easy order execution. Analyze average daily volume and bid-ask spreads.
- Chart Patterns – Look for chart patterns that suggest potential breakouts or breakdowns. Common patterns include triangles, flags, and head and shoulders.
- Technical Indicators – Indicators like moving averages, MACD, RSI, and Bollinger Bands can pinpoint low-risk entry and exit levels.
- Fundamentals – While swing trading mostly utilizes technical analysis, reviewing fundamentals provides extra context on catalysts.
- Sector Trends – Assessment of sector and industry trends offers insight into whether a stock aligns with broader momentum.
Keeping these elements in mind, here are 10 of the best stocks for swing trading based on their recent price action and volatility.
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1. Advanced Micro Devices (AMD)
Advanced Micro Devices (NASDAQ: AMD) is a leading semiconductor company that has become a favorite for swing traders in the tech sector.
Key stats:
- 1-year return: -46.53%
- Average volume: 63,986,857
- Market cap: $112.49B
AMD stock has experienced substantial volatility recently, fluctuating widely around its 50-day and 200-day moving averages. Its sensitivity to news events provides chances to profit.
The increased adoption of AMD’s EPYC and Ryzen processors position it strongly to benefit from secular growth trends. However, its correlation with the wider chip sector contributes to its volatility.
Overall, AMD ticks numerous boxes for swing trading – it has uncertainty around its next catalyst, high liquidity, and a recent uptrend forming.
2. Tesla (TSLA)
As a pioneer in electric vehicles (EVs), Tesla (NASDAQ: TSLA) has been a rollercoaster stock over the past several years. Its meteoric rise and steep drawdowns have resulted in extensive volatility.
Key stats:
- 1-year return: -65.04%
- Average volume: 145,792,450
- Market cap: $405.07B
The significant production ramp Tesla has planned with its new factories in Austin and Berlin is an imminent catalyst. However, the stock remains sensitive to delivery figures, Musk’s ventures, and the appetite for high-growth stocks.
With uncertainty heightened by its towering valuation, TSLA offers fertile ground for swing trades around its technically-driven trends.
3. Nvidia (NVDA)
As a leading designer of graphics processing units (GPUs), Nvidia (NASDAQ: NVDA) plays a pivotal role in gaming, data centers, AI, and the metaverse. Its exposure to secular growth trends makes it a long-term winner – albeit with gut-wrenching volatility recently.
Key stats:
- 1-year return: -50.89%
- Average volume: 46,457,159
- Market cap: $405.12B
After plunging from its late 2021 highs, NVDA stock has found support near $120 and its 200-week moving average. This lines up with a multi-year breakout level and suggests potential for a renewed uptrend.
If momentum in core business lines like data center and gaming picks up pace, NVDA could stage an explosive move higher. Its liquidity and volatility provide an ideal swing trading environment.
4. Netflix (NFLX)
As the world’s leading subscription streaming service, Netflix (NASDAQ: NFLX) pioneered the media consumption model that has disrupted traditional Pay-TV. However, its quest to retain subscriber growth has resulted in precarious volatility.
Key stats:
- 1-year return: -9.39%
- Average volume: 10,492,010
- Market cap: $97.07B
NFLX stock lost over 50% in 2022 amidst slowing subscriber growth. But recent optimism around content slate and new ad-supported tier has shares recovering strongly.
With uncertainty around peak subscriptions and cash burn trajectory, NFLX is likely to remain a volatile battleground stock. This grants swing trade opportunities around its technically-driven trends.
5. Meta Platforms (META)
As the parent company of social media giants Facebook and Instagram, Meta Platforms (NASDAQ: META) boasts tremendous reach and engagement. However, its focus on building the metaverse has resulted in spiraling costs and earning volatility.
Key stats:
- 1-year return: -57.58%
- Average volume: 42,414,598
- Market cap: $370.25B
After plunging over 70% in 2022, Meta stock has bounced sharply from its late October lows. Shares have reclaimed its 200-day moving average, with bullish momentum accelerating.
Renewed traction for Reels and easing cost pressures could maintain tailwinds. Nonetheless, META’s uncertainty from metaverse investments will likely sustain volatility. Its technical patterns make it well-suited for swing trading.
6. Amazon (AMZN)
As the e-commerce leader, Amazon (NASDAQ: AMZN) also operates the world’s largest cloud platform (AWS). It has been a core market performer but disappointing earnings resulted in rare underperformance in 2022.
Key stats:
- 1-year return: -48.50%
- Average volume: 84,489,312
- Market cap: $895.81B
AMZN stock has rebounded over 35% from its November lows amidst improved AWS momentum and resilience as consumers trade down. Price action has reclaimed its bullish 50-day moving average.
Lingering macro uncertainty and difficult earnings comparisons temper optimism on a swift recovery. This uncertainty, coupled with its liquidity, underscores AMZN’s reliable volatility for swing traders.
7. Snowflake (SNOW)
As a leading provider of cloud data storage solutions, Snowflake (NYSE: SNOW) operates a high-growth Software-as-a-Service (SaaS) model. Its prospects remain bright, but the higher rate environment has made its cash burn deployment model more penalizing.
Key stats:
- 1-year return: -50.15%
- Average volume: 5,403,223
- Market cap: $44.76B
Despite strong product adoption, SNOW has been unable to escape the valuation compression across unprofitable technology stocks. However, its recent stabilization near the $150 level and bullish chart patterns suggests upside potential.
While data monetization traction can re-ignite its uptrend, economic uncertainty sustains volatility risk. This makes SNOW a quintessential swing trading candidate.
8. Block (SQ)
As a financial services and digital payments company, Block (NYSE: SQ) operates the popular Cash App and Square POS platform. Its focus on serving small businesses and integration across its ecosystem underpins a robust secular growth narrative.
Key stats:
- 1-year return: -37.91%
- Average volume: 13,701,123
- Market cap: $49.51B
SQ stock has been highly sensitive to changing rate hike expectations given its growth stock nature. However, strong volume trends on its recent rally suggest the potential for a sustained recovery.
With several upcoming catalysts like crypto integration across Cash App and international expansion, volatility tailwinds remain strong. This grants lucrative swing trading conditions.
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9. PayPal (PYPL)
As a pioneer in digital payments, PayPal (NASDAQ: PYPL) offers solutions enabling electronic funds transfers worldwide. Despite facing intensifying competition, it retains leadership in key verticals like e-commerce checkout.
Key stats:
- 1-year return: -54.11%
- Average volume: 14,375,229
- Market cap: $90.82B
PayPal stock has struggled amidst market share losses and a hawkish Fed tempering growth outlooks. However, its recent break above its 200-day moving average and bullish momentum signals a potential trend reversal.
With several upcoming catalysts on the horizon, including further monetization of Venmo and cross-selling through Honey, volatility persists. This cements PYPL’s credentials as a swing trading candidate.
10. Palantir Technologies (PLTR)
As an enterprise software company specializing in big data analytics, Palantir Technologies (NYSE: PLTR) supports government agencies, healthcare systems, and financial institutions. Commercial traction has been steadily improving but continues to undershoot lofty expectations.
Key stats:
- 1-year return: -52.90%
- Average volume: 34,982,702
- Market cap: $20.96B
PLTR shares have rebounded sharply from their recent lows below $7, rallying over 45%. Improving margins and key contract wins reinforce its long-term upside case.
However, lumpy government deal flows and spending scrutiny inject uncertainty over growth consistency. This volatility creates fertile swing trading conditions around PLTR’s technical price levels.
Key Takeaways
In summary, analyzing recent price action and volatility trends helps identify compelling swing trade stocks:
- Seek stocks exhibiting technically-driven moves with momentum
- Focus on liquid names you can enter and exit swiftly
- Utilize indicators like moving averages to spot trend changes
- Review upcoming catalyst events driving uncertainty
- Assess sector and industry trends for tailwinds
As evident from this analysis, semis, software, EVs, and e-commerce stocks represent fruitful swing trading sectors currently. Their continued innovation-driven volatility produces tradeable moves.
To Recap
In closing, swing trading continues to rise in popularity amongst active traders given its prospect of seizing profits from turbulent markets. Mastering stock selection and indicator techniques can produce market-beating returns.
This analysis of the top 10 swing trade stocks highlights the optimal blend of fundamental narratives and technical price action to pursue. As evident, factors like volatility, liquidity, catalysts and sector momentum help determine suitability.
While swing trading will remain inherently risky, the outsized reward potential makes skill cultivation worthwhile. Adaptability also proves key – be ready to rotate across sectors and stocks displaying the clearest technical edge at any moment.
FAQs
What is swing trading?
Swing trading involves holding stocks for a few days to weeks to profit from price fluctuations. It aims to capture swings in momentum using technical analysis. Swing traders focus on stocks with frequent volatility and adequate liquidity.
What returns can you make swing trading?
Typical swing trading returns range from 5% to 15% over a timeframe of a few days to weeks. However, experienced swing traders can achieve substantially higher returns in the 20% to 30% range during periods of above-average volatility.
How much money do you need to start swing trading?
Most brokers allow starting swing trading with account minimums ranging from $500 to $2,000. While starting capital thresholds are low, at least $5,000 to $10,000 enables trading a diversified basket of stocks while properly managing risk.
What technical indicators are best for swing trading?
Key technical indicators swing traders rely on include moving averages, support/resistance levels, RSI, MACD histograms, Bollinger Bands, OBV, and candlestick patterns. Using a combination of these indicators provides high-probability swing trade signals.
Is swing trading riskier than long term investing?
Yes, swing trading tends to carry more risk compared to long-term investing given its short-term holding horizons. Unexpected news events and volatility spikes can swiftly negate gains. Strict risk management through stop losses and position sizing is critical.
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