Best 3 stocks for Swing Trades

1. Tesla

Analyzing Tesla on a Daily time-frame, it can be seen that the price started falling in January 2022, several times it took support of the support line (green trendline). Once again, the price is in the range of the support zone. The green rectangle is the demand area formed post-covid fall. If TSLA sustains the price at this range, it will show a strong movement upside. However, if the price breaks below the support zone, then it can go lower making the price more affordable for the buyers.

On the 4H time-frame (also on the Daily time-frame), there is a clear Bullish divergence formed between the price and the RSI. (Yellow lines indicate the Divergence). “RSI Divergence occurs when the Relative Strength Index indicator starts reversing before price does.” This occurrence indicates a Reversal of the trend. However, the market does not seem to be in the mood of reversal. So, instead of a complete reversal ,tesla might retrace the fall and a short term buying trend might be possible here. 

 

 

In the Bearish event, Tesla will be retesting the consolidation zone(green box, as shown in the picture above) and will go lower.

Expected Targets:
Upper side: $155 and $200 respectively. 

Down side: $92 and $55 respectively. 

(It would be wise to select a farther expiry date for option traders, depending on the trend tsla moves).

 

2. Amazon (AMZN)

Amazon is taking time at the important price level of $80. If it breaks above $90 in a couple of days. Amazon would be seen retracing upwards and go up till the upper trendline. The first target can be $103, as it broke its previous support level of $103. Price $103 acts as an important level going upwards as the price was unable to break down from the level from May-12-2022 to Jul-13-2022, and it came closer to this level on Oct-14-2022. Secondly, after the earnings the price fell much below and created a 52-week low on Nov-09-2022. The price then got rejected from $103, and since it's still down. Amazon might test this level again, after the consolidation level of $80. 

On the other hand, if it breaks below $80, it can go much lower to $65-$68.

(It would be wise for option traders to select a farther expiry date, depending on the trend Amzn moves)

 

3. SPY

Spy can be seen breaking down the Rising Wedge pattern, and forming a Bearish Flag and Pole Pattern on a Daily time-frame. Bearish or Inverted Pole and Flag pattern on any chart is a bearish sign and the price of that particular stock falls. According to the text-book theory, the price falls to the length of the pole of that flag. However, looking at the simple levels seen on the chart, it can be seen that if SPY falls from the consolidated zone(flag) the first target would be $365 and if it keeps falling (certainly after a small pause at $365 or not) the next target would be $349. 

On the other hand, if SPY decides to move upwards from the consolidation zone, the first target would be around $393. $393 was the support level from Nov-11-2022 to Dec-14-2022, which broke down and created the flag and pole pattern.The second target will be $410. As, SPY rejected this level two times previously.