3 Credit Services Companies to Trade

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3 Credit Services Companies to Trade

The buy-and-hold investment strategy has been very profitable for investors for the greater part of the last decade as stocks have continued to climb higher in what is now the longest bull market in the history of the market. Since the end of the Great Recession, the value of stocks has significantly increased because to factors such as historically low interest rates, quantitative easing, tax cuts, and corporate buybacks.

All of that changed at the beginning of October when investors began paying more attention to business results, notably those of the FAANG firms, which act as a barometer not just for the technology sector but also for the whole economy. Investors are concerned about a number of issues, including the possibility that the Federal Reserve (Fed) could raise interest rates more quickly than anticipated, as well as the recent inversion of the yield curve, which indicates that an economic slowdown is on the horizon. According to Art Hogan, chief market strategist at B. Riley FBR, speaking to CNBC, “unfortunately, until we get fresh news, the market remains a cauldron of concerns, leading investors to be cautious.” This statement was made.

Traders who wish to employ range-bound trading strategies to generate money in this new market climate may find successful trading opportunities in these three oscillating credit services organizations. These strategies include trading within a predetermined price range. Let’s take a more in-depth look at each of these options.

Visa Inc. (V)

Visa operates a global payment network that is present in more than 200 countries. The company, which is headquartered in San Francisco, is responsible for authorizing, clearing, and settling electronic payment transactions. Visa generates revenue via the collection of fees that are proportional to the number and value of transactions. As of the 12th of December in 2018, Visa stock had a market value of $312.35 billion, paid a future dividend yield of 0.73%, and was up 21.7% year to date (YTD), which was more than the S&P 500 Index’s gain of more than 20% for the same time period.

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Visa’s share price saw a consistent upward trend from January through October. Since that time, the share price has moved up and down within a trading range of twenty points, making it possible for investors to generate profits by using range-bound strategies. Consider buying Visa on dips down to $130, since this is where the price should find support from the bottom of the trading range. Consider going short on the market if it moves over $145 and reaches the top of its trading range. Think about taking profits when the market delivers a signal in the opposite direction of your position. Traders should put a stop-loss order precisely outside the trading range’s lower trendline for a purchase and exactly outside the trading range’s higher trendline for a sell in order to protect their capital.

Chart depicting the share price of Visa Inc. (V)

StockCharts.com

Mastercard Incorporated (MA)

Mastercard, which has a market value of 204,22 billion dollars, provides transaction processing solutions including authorization, clearing, and settlement, in addition to the related products and services. The company makes money via the dollar volume and card activity fees that they charge its customers. As of the 12th of December in 2018, the performance of Mastercard shares over the course of the year is 31.51%, and the dividend yield is 0.67%.

The bulk of Mastercard’s year-to-date gains came in the first nine months of the year, similar to Visa’s pattern, but the company’s stock has been relatively stable since then. Surprisingly, both volume and volatility have increased, but price movement has remained range-bound since the beginning of the year. Traders have the option of initiating long positions on retracements to the lower end of the trading range, which is located between $180 and $185, while another strategy may be to short rallies to the range’s top price of $210 in the event that the price moves higher. It is possible to confirm overbought and oversold levels by using price movement in conjunction with momentum indicators like the relative strength index (RSI) and the stochastic oscillator. Traders may set their own profit targets and limit losses by using the identical processes that were outlined before.

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Chart depicting the share price of Mastercard Incorporated (MA)

StockCharts.com

PayPal Holdings, Inc. (PYPL)

PayPal is a platform for processing payments that was established in 1998. It facilitates financial transactions for both consumers and businesses. It accepts payments via a variety of methods, including PayPal, PayPal Credit, Braintree, Venmo, Xoom, and Paydiant. The company generates revenue via the collection of transaction fees as well as the provision of other financial services such as lending. As of the 12th of December in 2018, the stock of PayPal, which is now trading at $85.51 and has a market value of $100.76 billion, has returned 15.36% for the year to date.

The stock price of PayPal seems to be similar to the stock prices of the other two companies that were featured in the sense that it has moved laterally over the course of the last two months. Traders should take note that the 50-day simple moving average has just broken down below the 200-day simple moving average. A “death cross” is what market analysts call this pattern, which shows that prices are moving in a negative direction. Those who are interested in making a profit from the present trading range of 13.5 points should acquire between the prices of $76 and $78 and sell between the prices of $88 and $90.

Automating the trade management process may be accomplished by traders via the use of conditional orders, such as an order sends order (OSO).A trader may, for instance, affix an OSO to a limit order, which would then cause the trading platform to carry out a one-cancels-other order (OCO).The OCO order cancels the order for the opposite side after it has been filled and simultaneously sets a stop-loss order and a take-profit order.

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Chart depicting the share price of PayPal Holdings, Inc. (PYPL)

StockCharts.com

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