Swing trading stock picks for today: AUQ, GORO

The two swing trading stock picks for today are AUQ and GORO. Since the two companies are gold producers, buying AUQ or GORO shares is another way to invest in gold.  Yet, picking these specific stocks for today wasn’t done because of gold price, but because of their charts. They are both inviting long traders as their shares are trading at key support levels and bullish reversal patterns have been completed at the daily charts.

Traders don’t need to apply some kind of magic formula in swing trading. Simple swing trading strategies have proven themselves quite profitable in the past. You only need to write down a couple of rules in your stock trading system and be disciplined enough to follow them. Regarding today’s stock picks, there is one simple trading rule and that is called stop loss and it will save us money should the stock picks underperform.  If on the other hand we are spot on with our predictions, profit targets also obey to a simple rule but it is much easier to exit the market when we are making money than when losing.

GORO swing trading stock pick

New traders might not have seen a box chart before. Even I hadn’t seen one during the first 3 or 4 years of trading the stock market! It is the box chart of GORO stock though that points out the trend reversal, which took place last week.

GORO shares have been down trending since December to say the least. Note the 6 most recent red successive candlesticks. Buyers were nowhere to be found until March, 6. The stock price printed a new 5-day high, overcoming the highest high of the last 4 candlesticks. Given the signal would also be reliable if it just hit the 3-day high, this better-than-average pattern strongly suggests a trend reversal.

The pattern was completed at the support level that is pointed out in the monthly chart (picture-in-picture). When looking for key support or resistance levels, it is recommended by trading experts to check out charts of long term timeframes. It seems stock prices find better support or meet more resistance there. Thus, buying GORO stock is justified both by the bullish pattern and the support level at the monthly stock chart. A stop loss order must be set right below that particular level.

AUQ swing trading stock pick

The same strategy can be applied when trading AUQ stock. Starting at the other end this time and looking at the monthly stock graph (picture-in-picture), technical analysis indicates a strong support level at 6.00. AUQ shares might have tried before to trade higher than 12 dollars a share, but eventually failed and collapsed 3 times in the past to about 6 dollars. Now it is the fourth time that AUQ stock is testing the support level.

The test will either lead to a confirmation or to a break down. Support levels are meant to provide support but they can fail from time to time; otherwise stock prices would climb all the time! That is why a stop loss is essential to minimize the losses.

According to the trading strategy, profit targets for both swing trading stock picks for today are recommended at twice the range of the entry bar. Therefore, I would pick a profit target for AUQ at 7.20 and for GORO at 15. On the other hand, since our decisions were based on the trading activity at monthly graphs, setting targets much higher shouldn’t be out of the question. Yet, I would trade out at least half of my long position at the first profit target and move the stop loss order to the breakeven point. Better safe, than sorry.

Disclaimer: I am long AUQ and short GORO.

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