Best Swing Trade Stocks

Looking for swing trading stocks? Benzinga is here to inspire you with a few stocks that are perfect for swing trading. The markets are constantly fluctuating, and these stocks regularly change to help you make informed decisions. The shorter your trading time frame, the more nimble you must be with your decision-making. Swing trading is much riskier than buying and holding, so get out of bad trades quickly and set profit-taking targets on your winners.

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Contributor, Benzinga
May 19, 2022

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Microsoft (XNAS:MSFT)

Microsoft develops and licenses consumer and enterprise software. It is known for its Windows operating systems and Office productivity suite. The company is organized into three equally sized broad segments: productivity and business processes (legacy Microsoft Office, cloud-based Office 365, Exchange, SharePoint, Skype, LinkedIn, Dynamics), intelligence cloud (infrastructure- and platform-as-a-service offerings Azure, Windows Server OS, SQL Server), and more personal computing (Windows Client, Xbox, Bing search, display advertising, and Surface laptops, tablets, and desktops).

Microsoft
(XNAS:MSFT)
$240.74
Last update: 4:00PM
Day Range- - -52 Wk Range232.73 - 338Open / Close- / -Float / Outstanding- / 7.5B
Vol / Avg.5.8K / 24.9MMkt Cap1.8TP/E24.9550d Avg. Price264.65
Div / Yield2.72/1.13%Payout Ratio25.08Total Float-EPS-

Caterpillar (XNYS:CAT)

Caterpillar Inc. is the world’s largest manufacturer of construction and mining equipment. This equipment includes diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives. Caterpillar operates under 4 business segments — construction industries, resource industries, energy and transportation and financial products.

The construction stock has a market cap of $87 billion and an EPS of $7.45. It has an annual dividend yield of $4.12 per share. Caterpillar has high liquidity and trades more than 2.1 million shares per day and generated revenue $53 billion in 2019.

Caterpillar
(XNYS:CAT)
$171.21
-0.02[-0.01%]
Last update: 3:59PM
Day Range- - -52 Wk Range160.6 - 237.9Open / Close- / -Float / Outstanding- / 527.9M
Vol / Avg.- / 2.7MMkt Cap90.4BP/E13.7150d Avg. Price184.39
Div / Yield4.8/2.80%Payout Ratio35.55Total Float-EPS-

Kellogg (XNYS:K)

Founded in 1906, Kellogg is a leading global manufacturer and marketer of cereal, cookies, crackers, and other packaged foods. Its offerings are manufactured in 21 countries and marketed in more than 180 countries. Its product mix includes well-known brands such as Special K, Frosted Flakes, Froot Loops, Rice Krispies, Pop-Tarts, Eggo, Kashi, and Morningstar Farms. The firm added the Pringles brand to its mix in 2012. Sales outside its home turf account for around 40% of Kellogg’s consolidated sales base.

Kellogg
(XNYS:K)
$71.08
0.01[0.01%]
Last update: 3:59PM
Day Range- - -52 Wk Range59.54 - 76.99Open / Close- / -Float / Outstanding- / 340.1M
Vol / Avg.- / 2.3MMkt Cap24.2BP/E16.3850d Avg. Price73.46
Div / Yield2.36/3.32%Payout Ratio53.46Total Float-EPS-

Kellogg (XNYS:K)

Founded in 1906, Kellogg is a leading global manufacturer and marketer of cereal, cookies, crackers, and other packaged foods. Its offerings are manufactured in 21 countries and marketed in more than 180 countries. Its product mix includes well-known brands such as Special K, Frosted Flakes, Froot Loops, Rice Krispies, Pop-Tarts, Eggo, Kashi, and Morningstar Farms. The firm added the Pringles brand to its mix in 2012. Sales outside its home turf account for around 40% of Kellogg’s consolidated sales base.

Kellogg
(XNYS:K)
$71.08
0.01[0.01%]
Last update: 3:59PM
Day Range- - -52 Wk Range59.54 - 76.99Open / Close- / -Float / Outstanding- / 340.1M
Vol / Avg.- / 2.3MMkt Cap24.2BP/E16.3850d Avg. Price73.46
Div / Yield2.36/3.32%Payout Ratio53.46Total Float-EPS-

Kohl's (XNYS:KSS)

Kohl’s is a department store retailer with over 1,000 locations in the U.S., but like most retailers, they’ve taken in on the chin during the coronavirus lockdowns. While not on ground as shaky as department stores like Macy’s and Neiman Marcus, Kohl’s stock is down nearly 60% in the last 3 months.

Kohl’s has all the features needed for a terrific swing trade — high beta, over 15% short interest and approximately 14 million shares traded daily on average. Kohl’s also has an upcoming catalyst — an earnings call on May 19.

Kohl's
(XNYS:KSS)
$26.00
-0.04[-0.15%]
Last update: 3:59PM
Day Range- - -52 Wk Range24.61 - 64.38Open / Close- / -Float / Outstanding- / 116.6M
Vol / Avg.- / 5.1MMkt Cap3BP/E5.2250d Avg. Price29.17
Div / Yield2/7.68%Payout Ratio30.06Total Float-EPS-

Day trading might sound like a fun way to make a living, but it’s a hard game for new traders to break into. Not only do day traders need high-tech stock scanners to locate stocks with potential, but the Financial Industry Regulatory Authority (FINRA) has strict rules in place limiting who can day trade. 

Unless you have an account balance of $25,000, you’ll be limited to 3 day trades in a rolling 5-day period. That means if you complete 3 day trades on Monday and open a new position on Tuesday, you’ll need to hold that position overnight to avoid getting flagged with a pattern day trader (PDT) violation. But most brokers won’t even let a 4th day trade execute — and you could be stuck holding the bag.

To avoid these FINRA restrictions, many investors use swing trading. Swing trading is still a short-term trading strategy but stocks are held overnight to avoid the PDT rules. Swing traders hold stocks for 24 hours to 2 days hoping to profit off high volume swings like short squeezes or earnings beats (misses). 

Overview: Swing Trade Stocks

Swing traders expose themselves to the most volatile moves by holding overnight, however the profits can be exponentially higher, especially if using options. The best stocks for swing trading are ones with known catalysts, high volume and enough volatility to make short-term trading profitable.

Sectors matter little when swing trading, nor do fundamentals. This is not investing for the long-term, so technical signals matter more than price ratios and debt loads. A company with a mountain of long-term debt and dry cash flow can still be a perfectly profitable swing trade. 

Successful swing traders have to be nimble with their convictions — a stock with accumulating volume ahead of earnings might be one to sell short instead of buy. Swing traders use a variety of different strategies to enhance profits, but the stocks they look for all share a few common characteristics. 

You can find options online to help you get started swing trading. Mindful Trader provides stock picks and options picks, but it can also teach you the trading strategy behind them. The Mindful Trader approach is based on data and statistics. Sign on for support from Mindful Trader for just a flat $47 per month.

Best Online Brokers for Swing Trade Stocks

Swing trading and long-term investing are completely different animals, so you’ll need a broker that fits your needs. Swing traders should look for brokers with $0 commission or discounts on high-volume trading. 

You don't need a $25,000 account balance to swing trade, but you’ll likely need a margin account if you want to sell short or swing trade with options. And since the best swing trading stocks are often thinly-traded small caps with only a handful of shares available, make sure your broker has a wide assortment of stocks to trade.

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Features to Look for in Swing Trade Stocks

When searching for swing trading stocks, don’t look at debt levels or price-earnings ratios. Those stats might matter for a company’s long-term prospects, but swing traders care about where a stock will be a couple of days, not a couple of years or decades. 

Here’s what to look for if you want to get into swing trading.

  1. Catalyst: Most swing trades begin by locating a catalyst that could trigger a powerful move in a stock. This could be a clinical trial in a pharmaceutical company, an unexpected earnings miss or beat, or even the removal of an executive or CEO. 
  1. Volume: Big moves in short time frames are impossible without significant volume in the stock. Sure, lightly-traded stocks can be coerced into big moves without much volume. But in the majority of your swing trades look for stocks with more volume than usual.
  1. Volatility: With great volume comes great volatility. Volatile stocks are good swing trading stocks because swing traders profit from large, short-term moves. A stock trading in a tight weekly range likely won’t produce a ton of opportunities for profit. But if 5% moves are occurring daily, you’ll find plenty of chances for swing trades.

Swing Trading for Short-Term Profits

Swing trading is not a long-term investing strategy. In fact, it’s not even really investing at all. The stock market is an accounting system for long-term financial prospects and investors use it to get a piece of those (eventual) profits. But swing traders look at the market differently. By using technical trading signals in volatile markets, swing traders can make great profits in short time periods. Swing trading requires precision and quickness, but you also need a short memory. You will have a trade blow up when swing trading; how you react determines how successful you can be as a swing trader in the long run. 

Want to learn more? Check out Benzinga’s guides to the best swing trading coursesbest online brokeragesfree stock trading and best stocks under $5.

Frequently Asked Questions

Questions & Answers

Q
Can you become wealthy swing trading?
A

Swing trading can produce higher returns than the averages, but you must have a good strategy and be alert for changes.

Q
How much do you need to start swing trading?
A

The best amount is between $5,000 and $10,000.