The market has been absolutely on fire this week … In fact, the iShares Russell 2000 ETF (IWM) that follows the Russell 200 index was up as much as 7.2% over the last two days.
That’s an incredible move for an index in such a short time.
If you’re on the sidelines studying how to trade or just dipping your toes in — you might feel some FOMO…
It can feel like you’ve missed the big move.
But I think the market bounce is just beginning…
And you’ll never time the market just right.
So there’s no better time to start trading than right now. Here are some trends that active traders are taking advantage of right now…
Three Market Trends to Take Advantage of Now
There are three major trends I see that are working in the market right now.
It doesn’t matter if you swing trade or day trade, you can take advantage of these…
Premarket Trading
Small caps are spiking huge in premarket. But the moves in regular hours aren’t as predictable right now…
We haven’t seen many textbook dip and rip setups or afternoon VWAP holds lately. But we’ve seen a lot of buy in pre, sell in pre trade opportunities.
These look a lot like a dip and rip but it happens in premarket…
A stock has a big spike, pulls back, and forms a support level, then it breaks above the high of the initial spike. That’s your potential entry.
But keep in mind that premarket trading is aggressive. There’s nothing wrong with that, but I like traders to only trade in premarket if they’re on a hot streak or experienced.
And you still have to have the other criteria in place before you trade — volume, a catalyst, trapped short sellers…
Plus, a trading plan that includes your entry, risk, and goal.
I shared my premarket trade plan in BioCardia, Inc. (NASDAQ: BCDA) yesterday. Read about it here.
Swing Trading
Swing trading is another strategy that’s working well in this market.
The overall market bounce has created plenty of large-cap stock runners.
My weekly watchlist has featured plenty of swing trade ideas lately…
Like CrowdStrike Holdings, Inc. (NASDAQ: CRWD) after it broke out to new 52 highs.
CRWD chart: 6-month, daily candle — courtesy of StocksToTrade.com
And Microsoft Corporation (NASDAQ: MSFT) which had the same move last week…
MSFT chart: 6-month, daily candle — courtesy of StocksToTrade.com
A stock with a new high is one of the criteria I look for in potential swing trades.
I also like it when it has a catalyst. And we’re in one of the best times of the year for trading news…
Catalyst Trading
Breaking news has the potential to move stocks in any market environment … Whether it’s sketchy biotechs with news, macro headlines moving stocks, or a short report that crushes a stock.
Either way, the Breaking News Chat team is there to alert you to any catalyst that has the potential to move stocks.
Right now, we’re in earnings season. And that’s sparking multi-day runs in large and small-cap stocks.
DraftKings Inc. (NASDAQ: DKNG) went on a multi-day run after earnings on November 2.
DKNG chart: 6-month, daily candle — courtesy of StocksToTrade.com
And Target Corporation (NYSE: TGT) just gapped up and gained 17% after announcing earnings yesterday.
We’ll see if it’s over-extended or can still run from here…
TGT chart: 6-month, daily candle — courtesy of StocksToTrade.com
But small caps are running on earnings too…
Direct Digital Holdings, Inc. (NASDAQ: DRCT) announced earnings on November 9.
It gapped up after the news and is still holding up after a multi-day run.
This could set up for a nice breakout in a few days if it continues to consolidate.
DRCT chart: 6-month, daily candle — courtesy of StocksToTrade.com
Breaking news hits the market every day creating premarket spikers, potential swing trade opportunities, and the chance to ride the momentum of the catalyst.
So there’s no better time to trade…
Get the Breaking News Chat to help you stay on top of all the hottest news announcements.
And if you need help picking high-odds setups over the junk — get an AI trading system on your side here.
Have a great day everyone. See you back here tomorrow.
Tim Bohen
Lead Trainer, StocksToTrade