It might be difficult for any active trader to see opportunities in the stock market. Not even the most sophisticated traders are exempt from entering periods of doubt when old winning strategies stop working. The question is this: How do traders maximize their chances for success in a constantly shifting market?
Whether trading independently or in a proprietary trading firm, proper tools, strategies, and watchlists really help someone understand and succeed inside these markets. S&B Capital teaches its traders to regard markets in the same way as pro athletes—continually honing their craft. That strong effort is what may make the difference between two competitors trying to outdo each other or being a clear model of any trader looking to achieve consistent success in trading.
Key stock plays and trade strategies for the next week are elucidated so that traders can hone in on their trades. Using plays in a defined range, swing plays, and reactive techniques enables locking in short-term trades as well as bigger moves, with the flexibility necessary to navigate this volatile market.
Top Swing Trading Setups
1. GameStop (GME) – A Range Play with Looks Both Ways
Name: GameStop (GME), which has time and again proven to offer a defined range of opportunities and continues to do so. GME only today drew within striking distance of a support level that is seen as its next key level after a predictable move up from key resistance levels over the last week.
- Resistance Levels: If GME continues into last week’s high of $34 to $35, it could be resisted. Here, traders should pay attention to a potential failure to take and break this level, which would become a shorting opportunity.
- Support Levels: On the other hand, if GME approaches $24, look out for any support or higher lows around this level to take a long trade, similar to last week’s successful long near $24 with an exit around $31-$32.
Plan: Look for short-term reaction trades at these levels. Trade out of GME until it finds a new move in either direction if it goes below $25 or prints above $35.
2. ARM Holdings (ARM) – A Swing Trade Setup
ARM is another interesting stock, especially after failing on its breakout attempt last week. ARM showed relative weakness despite good news and strength in the broader semiconductor sector. This presents a potential short swing over the next couple of days.
- Broken Breakout: If ARM does not recover its developing multi-day VWAP or cannot stay above $160-$161, this would set up the framework for more of a downside squeeze.
- Short Position: The target for this short swing could be first around the $150 area and then potentially down into the $140s.
Plan: The short swing becomes appealing if recovery to prior high levels fails. Risk management is tied to VWAP and the high of the day on shorter timeframes.
3. LGVN – Small-Cap Scalping with Key Levels in Mind
This small-cap play, LGVN, is set to continue its volatility from the past week. It has been catching shorts off guard with strong upward moves. Price action here will provide both short and long opportunities if traders remain reactive around key levels.
- Resistance Levels: LGVN is testing resistance at around the $3.80 to $4 range. If it fails to break above this level, there can be shorting opportunities for traders.
- Upside Potential: If LGVN pushes past $4, it could extend its move up to $4.50 or even $5, opening potential for long scalping before reaching a new resistance zone.
Plan: Be flexible and avoid bias while trading LGVN. Trade according to the level of interest and stay alert for failed short trades or a breakout above resistance.
4. Reddit Stock (RDTT) – The Streak Continues
The Reddit stock showed breakout potential last week but failed to continue convincingly. However, the stock remains in an uptrend and stays above the $60 level, making it worth close monitoring.
- Support Levels: If the Reddit stock can hold above $60 and establish a base, new breakout potential might give traders an opening for a swing trade.
- Breakout Strategy: Take a five-day base forming over $60 aggressively long to chase a new leg higher in the coming week.
Plan: Keep an eye on $60 and be ready to go long once the stock starts building its base or shows strong price action.
5. Semiconductor Sector – Profit-Taking Opportunity
The semiconductor sector, with stocks like Nvidia (NVDA), SMH, and SOXL leading, has been strong but might be due for a pullback. This week could present a sector rotation opportunity for traders looking to take advantage.
- Leaders: Nvidia is slightly overbought, but it still needs to be taken seriously in the overall market.
- Profit-Taking Strategy: Watch for signs of profit-taking or rotation into other areas. If Nvidia, SMH, or SOXL show weakness, reactive short-term trades may emerge.
Plan: Stay alert to reversals or consolidations in the semiconductor sector and react based on price action and market internals.
6. Risk Management – Key Focus in a Shortened Week
With a shortened trading week, expectations should be more conservative. Less volatility translates into lesser room for error due to fewer trading days. The essential point is to stay disciplined, keeping an eye on risk management, and only taking the best setups where clear support and resistance levels have been established.
Plan: Be flexible and avoid bias in your trades. If the market isn’t offering much, sitting on the sidelines might be a better option than forcing trades.
Conclusion
This week’s market presents a mix of reactive plays and potential swing opportunities across multiple sectors. Whether trading within the GME range, catching the lower end of a swing in ARM, or reacting to key levels in small caps like LGVN, flexibility and discipline in risk management are critical.
The best traders—often from proprietary firms—understand that real success lies not only in preparation but also in being flexible and reacting to changing market conditions.
