Swing Trading as a Complement to the Wheel

The Wheel is my bread and butter, but I also use swing trades to boost returns and take advantage of strong directional setups. Here’s how I approach swing trading as a complement to my options income strategy.

What Is a Swing Trade?

A swing trade is a medium-term directional trade held for days to weeks (vs. day trading which is same-day, or long-term investing which is months to years). I’m looking for stocks that have a clear technical setup and a near-term catalyst.

My Swing Trade Setup

Stock is in a clear uptrend (above 20 EMA, 50 EMA). It’s pulling back to a key support level (20 EMA, previous resistance turned support, fib level). Volume on the pullback is decreasing (healthy consolidation, not distribution). RSI is cooling off (between 40-50 after being above 60). There’s a clear catalyst coming (earnings, product launch, industry news).

Current Swing Ideas (April 2026)

RDDT: Testing support near the $100 area after a strong run. If it holds, this is a textbook bounce setup. I’d buy shares or calls for a swing to the $120+ range.

NBIS (Nebius Group): AI infrastructure play that’s been consolidating. Strong fundamental story — building out European AI data centers. The consolidation looks healthy.

SMCI: If it holds the $30 support area, could swing back to the $40+ range. High beta name — use smaller position size.

Swing vs. Wheel — The Key Difference

In a swing trade, I’m taking directional risk. I need the stock to go up. In the Wheel, I just need the stock to NOT go down through my strike. Swing trades have higher potential returns but also higher loss potential. I never put more than 10-15% of my portfolio in swing trades — the Wheel is always the core.

Risk Management for Swing Trades

Always set a stop loss below the key support level. If RDDT breaks below $95 cleanly, I’m out — it invalidates the setup. Never let a swing trade become a bag — that’s what the Wheel is for.