After a brutal April selloff, the U.S. stock market finds itself at a new low for 2022. This is bad news for most investors…unless you’re a swing trader.
The last few market downturns have been excellent opportunities for short-term traders that feast on “buying the dip”. January 24th, February 24th, and March 14th marked inflection points that proved to be chances to ride an upswing for a week or two.
It’s difficult to say if the latest bottom is in. The Fed’s interest rate decision is likely to set the tone for the remainder of the week. But for now, the technical indicators suggest it is. The S&P 500 is peaking below the lower Bollinger Band range on the daily chart, an event that previously marked reversals.
The story is the same in the mid-cap space where swing traders often get more bang for their buck due to the more volatile nature of smaller companies. These three names are among the most promising mid-cap swing trades.
Is Cactus a Good Earnings Play?
Oil & gas equipment provider Cactus, Inc. (NYSE: WHD) staged a high volume rally in March to reach a new all-time high. Soaring energy prices driven by the Russia-Ukraine war have already made the sector a big winner in 2022 and Cactus is no exception.
With oil prices slipping from their March peak, many oil-related names have done the same. However, with the geopolitical landscape still far from stable, crude prices are likely to remain volatile.
This means that the low-volume pullback in stocks like Cactus are probably a good chance to get in before the next leg up. A convincing move back above the 50-day moving average line may present a better entry point even if it means paying more because this would lend credibility to a resumed uptrend.
On the other hand, Cactus reports first-quarter results after the close on May 4th, so jumping in ahead of this potential catalyst may be better. Considering the company has a favorable pricing environment at its back and topped EPS expectations by a wide margin last time around, expect the stock to gush higher.
Is Allegheny Technologies Stock a Buy?
Allegheny Technologies Incorporated (NYSE: ATI) has pulled back about 10% following a five-month rally in above-average volume. It seems to have found good support at the 50-day moving average line where it has yet to dip below in 2022.
The specialty metals producer had high hopes heading into 2022 with the Street forecasting double-digit earnings growth and a sharp bottom-line improvement. We’ll get our first glimpse of how the year is going when Allegheny announces first-quarter results this week.
The company returned to profitability in the second half of last year amid wild swings in steel prices. Steel rebar futures have recovered nicely from their December plunge and having regained the $5,000 level should set Allegheny up for a solid Q1 result. Management has repeatedly beat bottom-line expectations since the start of the pandemic and often significantly. The topsy turvy pricing environment has made it a difficult business for analysts to bogey.
What the Street does seem to agree on is that Allegheny Technologies has more upside. The last six ratings issued on the stock have all been buys and point to a return to the $30’s. This could come as early as this week.
Will Cedar Fair Stock Go Up?
Trading in amusement park operator Cedar Fair, L.P. (NYSE: FUN) has gone quiet since SeaWorld made an unsolicited bid to purchase the company. The offer was later rejected and Cedar Fair shares promptly rode back down the roller coaster as usually happens when a takeover proposal falls through.
The SeaWorld fiasco aside, there’s a lot to like about Cedar Fair as not only a reopening play but a swing trade. The company reports first quarter results this week and the market will be looking for signs of momentum after a 2021 resurgence. As thrillseekers returned to Cedar Fair’s 13 amusement and water parks, in-park spending hit a record and overall revenue climbed to within 9% of pre-pandemic levels.
While management acknowledged a tough labor market, it offered a bright outlook for 2022 with park traffic on the rebound and delayed park renovation projects set to resume. Cedar Fair invested more than $200 million in new attractions and entertainment to keep guests coming back for more.
Traders that rode the Sea World rally may want to come back for more. Analysts are projecting a sharp swing to profitability this year and have target prices that reflect it. The stock’s inexpensive 15x forward P/E leaves plenty of room for multiple expansion. Fasten your seat belt, the ride back up the roller coaster is about to begin.