The week leading up to an election is famous for its uncertainty in the markets. This can be challenging because established swing trading setups will not hold through, especially in large-cap stocks. Active traders will find themselves looking for trades to stay profitable, but when markets are in a state of flux, that can be overwhelming.
In this regard, the trading platform offers strategies and a community focused on maximizing market inefficiencies while managing risk well. Their insights on swing and day trades prove invaluable for traders who wish to navigate volatile periods soon.
For this week, we are going to zero in on high-conviction swing and day trade setups that focus intraday momentum and manage through the election’s potential impacts on the markets. Here are our top picks and sets:
High-Conviction Swing Trade Idea: SMR
Overview: One of the nuclear energy SMR is showing positive breakout conditions. This stock possesses all relevant technical and market elements for the swing trade candidate.
Technical Set Up: Chart on SMR has very impressively remained above old resistance points at $17, that is now functioning as the support. Moreover, technical shows consolidation signs in the trend. Elevated short interest combined with a rather small float creates a sense of high breakout potential as long as the momentum endures.
Trade Plan
- Support: Across multi-time frames it is noted that the current level lies at $17.
- Short-term resistance: It exists near $19 but the target will be made near to $20 secondary.
- Entry: Buy the dip within the consolidation zone if price remains above the 5-day moving average and closer to the upper quartile in this zone. When it begins to form a base there at $19, you can go ahead and add entries there.
- Exit: Tare off some profits with the move through $20 using trailing stops higher lows on a 5-minute chart and a multi-day move.
High-Conviction Day Trade Idea: Tesla (TSLA)
Summary: After Tesla’s earnings release recently ran hard, it created an opportunity for a day-three gap fade. This short-term trade may have potentially high returns without the burden of a swing trade.
Technical Setup: The stock has pretty good follow-through for the first and second days as it has risen quite a bit. Monday, which would be the third day, can be your entry point if it fails to sustain above recent highs.
Trade Plan
- Resistance Level: Approximately $270–$271.
- Entry: Look for a gap above the Friday high or a strong open that then is pushed back towards $270+. Failure at this level or gap and fail to hold results in a short position on a lower high relative to the day’s high.
- Exit: Target half an ATR, trail stops on lower highs on the 5-minute chart.
Consolidation Breakout: Bitcoin iShares (IBIT)
Summary Overview: Bitcoin is displaying an improved consolidation over the last couple of weeks and, indeed, is giving a very nearly perfect window for its eventual breakout in the course of the coming days. With uncertainty normally playing to Bitcoins, the elections might very well serve as a catalysis for further price movements of the currency.
Technical Setup: IBIT’s price has consolidated at the $39 level, potentially setting up a breakout above the resistance level. A multi-day move toward the highs of around $42 becomes feasible if the current range holds and consolidates.
Trade Plan
- Support Level: Keep watching $39 as a solid breakout base.
- Entry Strategy: Stay out early and watch for more volume and even range contraction into the vote. Enter at confirmed breakdown below $39 targeting downtrends into the high $30s.
- Exit Strategy: Set a stop below breakdown, exit at the decision to let price trade back weaker or below the intraday VWAP.
Intraday Momentum and Mean Reversion: DJT and PHUN
DJT Trade Setup
Overview: DJT may present a sell-the-news opportunity near or after the election date, possibly with a meaningful gap extension.
Trade Plan
- Intraday Focus: DJT has made outlier moves; if it gaps meaningfully or touches a high price area, look for an intraday mean reversion.
- Entry Strategy: Look for a price failure on an intraday high, perhaps low to mid-40s or higher. The idea is getting into short-term moves where entry signals are clear and apparent, especially if DJT gets to unsustainable levels.
- Exit Strategy: Take some profits off when DJT reverses back to intraday support, trailing stops for any movements over 50% ATR.
PHUN Trade Setup
Overview: PHUN is a sympathy play to DJT, and therefore, it can have a short setup if it follows the intraday moves. This stock was disconnected from DJT in the last trading sessions, and this is an ideal intraday mean reversion if it happens in line with DJT.
Trade Plan
- Resistance Level: Intraday push to $11–$12 for potential failure to sustain.
- Entry Strategy: Short on a high of day failure around the resistance area and look for the move back down to $9.50.
- Exit Strategy: Manage trades manually with significant reversals or breaks in trend, focusing profit targets on intraday support levels.
Conclusion
In the coming days, election tension will heighten the volatility of price movements in all sectors and asset classes. High-conviction set-ups like SMR for a swing trade, and Tesla for a day-three gap fade will provide target entry and exit into the momentum trade while minimizing risk. Bitcoin iShares might offer a longer-term play suited better for election volatility. Intraday mean reversion plays DJT and PHUN will provide more opportunities in this context.
These strategies are framed in the context of uncertainty management specific to the situation around the election, leading to structured setups and transparent exit plans for traders. At times of increased market volatility, sticking to disciplined, high-conviction trading plans can help active traders effectively navigate choppy conditions in the markets.