Swing Trade Setup 3 Months +

[robertbanking]

Hello you very amazing people that make up these forums, that share amazing information. I very much hope you are doing well.

I was kindly wondered regarding the best strategy for trying to setup a Swing Trading setup possibly over a 3 month period. For instance on the Nasdaq Meta dropped to around 90 USD a low for that year in November 2022 and slowly over the next 6 months rose to around 250 USD. The only change was views on sentiment, then volume returning again. There was certain clues to the recovery such as the daily volume above the 20 day average volume. I kindly wondered please what other technical indicators would be useful to try to please setup these long term swing trades? Further could these be combined with fundamental such as growing revenues etc that can be summarised around the business please? I would be very grateful and thankful for any support you can please give.

Sending you lots of good wishes and i very much hope you are happy and healthy. All the very best to you.

 

[robertbanking]

Hello you wonderful and amazing people. I do hope you are doing well. I am very sorry to follow-up, i kindly wondered if anyone had any thoughts on my above post please? Even if it is just a few sentences it would be more appreciated than you may know. Wishing you a wonderful day and all the very best to you.

 

[flashman57]

As you mention, if you're trading over a multi-month period, you need to be thinking about the performance of the underlying business. You say the only thing that changed is sentiment, but that clearly isn't true. Meta was in a downtrend for 12 months and made lows in Nov 22. During that downtrend, Meta had two consecutive earnings misses in Q3 and Q4 last year, then a beat in Q1 23. Clearly Meta's operational business performance had caught up with the performance of the stock, and so the valuation was low enough that it was now undervalued. Investors clearly concl;uded they were too pessimistic, and turned the stock around.

tl;dr you need to think about business performance and valuation to enter long term trades like this. Thinking solely about sentiment and technicals/trend will make it very hard for you.