Electric car stocks. The sector of the summer. Whenever there is a hot, hyped up, in-play sector, there are opportunities galore.
Not just in the sector leaders. But in the sympathy plays, the stocks that are related to the sector leaders, but not the names that are in the headlines. Doesn’t matter if the fundamentals say the stock “shouldn’t” be up here. Price action is king.
In my latest video lesson, learn the best electric car stocks to trade right now, how to trade them, and trade recaps on recent trades I took on $NIO and $WKHS:
Watching the Sector Leaders
This is key for finding sympathy plays BEFORE they make the big move. You have to keep an eye. One of the sector leaders in this case is Tesla. $TSLA has been on an insane run this whole year. This summer, other electronic companies and stocks related to the sector are trending with it.
The key is finding stocks in the same hot sector that have yet to breakout intraday. While Tesla was running, I saw $NIO and $WKHS had been consolidating nicely, and I got long.
Watching sector leaders is what allows you to have high probability breakout setups in sympathy plays. It also tells you when it’s time to exit the trade. If the leader starts to reverse, the sympathy plays will as well.
The 2020 Hot Sectors
Another sector you we this trend is in COVID-19 vaccine stocks this year. $MRNA is one of the leaders in this sector, and often other vaccine stocks like $NVAX will be in play at the same time. It’s the same setup, different names.
Study this pattern. When you see a sector in the news a lot, and stocks in the sector make huge run-ups, do your research, find names in that same sector. This pattern will repeat. Be ready. This is not a setup where you blindly buy stocks in a hot sector and hope they go up.
Self-Sufficiency: Finding Sympathy Play Stocks
In trading, the work you do outside of market hours is just as important as the time you spend trading. To trade sympathy plays successfully, you have to research the sector inside and out, and build your watch-list BEFORE the market opens.
You cannot just rely on a chatroom to spit out tickers for you to trade. You have to understand WHY you’re trading them. Do your homework the night before and during the pre-market before the open. Build a watch list. Make gameplans. Identify key support and resistance levels. Prepare for different scenarios.
You cannot “wing it” in trading. If you show up 9:30 to your computer every day looking to your chatroom for hot stocks to trade and trades to follow, you WILL lose all of your money. It’s only a matter of time. You cannot expect results without putting in the work.