Short-term trading is a business for some people, and it is the practice of taking positions in financial instruments such as stocks that last for short periods of time.
The time duration between entering the trade and exiting the trade in short-term trading ranges from a few seconds to a few weeks. The idea is to capitalize on advantageous short-term stock price fluctuations that can lead to gains and a profit for your business.
In this article, we highlight some promising businesses to watch when choosing short-term trading positions.
E-commerce has continued to soar in popularity during the COVID-19 pandemic, and Chinese giant Alibaba is going from strength to strength. All eyes were watching how it would perform since the pandemic, and the news is what investors want to hear.
According to CEO Daniel Zhang, Alibaba has delivered a strong quarter with 30% growth and in the year to June 2020, active consumers are up 16 million to 742 million.
The Alibaba Group represents a potentially lucrative short-term option. The company’s price continued to trend upward over the course of the pandemic while the broader market went down.
Aside from its e-commerce platform, Alibaba has its own cloud computing service, so the comparisons often made with Amazon are accurate. With a growing user base and solid share price performance, even buying now at higher prices than previously gives you a good chance to sell in the short term at a higher price.
USA Wells Fargo, the popular banking institution, is a good business to consider at present too when choosing the best short-term stocks to invest in. This is due to in part COVID-19, where the current macroeconomic factors of lower consumer spending and low-interest rates mean that Wells Fargo stock is cheap.
Global pandemics tend to be temporary, which means that macroeconomic factors are likely to improve in the next few months.
Better treatments and vaccines for COVID-19 will bring back a semblance of normality, which is likely to lead to price rises in Wells Fargo stock as banking activity increases.
The healthcare company and owner of over 9,000 CVS Pharmacy retail outlets is a group that’s also likely to remain on an upward growth trajectory as the world’s population pays more attention to staying healthy.
Growth should persist over the flu season lasting through the winter of 2020 and 2021. While stock prices are already on the rise, buying and selling in the short term has a good chance of delivering results.
The online payments system has experienced huge increases in its value as a result of both the trend towards a cashless society and the huge acceleration in e-commerce transactions during the pandemic.
Many people choose to pay for goods online with PayPal because the company has a buyer protection scheme in place that gives customers refunds if their orders don’t arrive. If you expect the trend towards e-commerce and online transactions to continue increasing, PayPal is a good choice in the short term.
It’s also worth noting that PayPal owns the Venmo mobile payment platform, which plans to introduce cryptocurrency trading and transactions.
Even if you’re buying high compared to last year’s price, the trends suggest there’s a good chance of making short-term gains on PayPal stock.
There is an unprecedented amount of uncertainty in the markets. Nobody knows exactly when the global pandemic will end, and the results of the USA election are likely to impact things too with Biden confirmed as the President-elect.
This selection of stocks is worth watching; however, if you want to engage in short-term trades, but it’s also important to consider this market uncertainty when making any investment decisions. Always seek professional advice before taking a leap of faith!