Christian Tharp, CMT
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Christian Tharp, CMT in Trading Made Simple,

Easy Trade of the Day:

CHTR pulls back

CHTR had been trending mostly sideways during the past year, while repeatedly hitting resistance at $195 (green). In March, the stock finally broke out, and it did so on a nice increase in volume. Now that the stock is pulling back, traders could expect the $195 level to act as support.

The Tale of the Tape

CHTR broke its 52-week resistance at $195. The possible long position on the stock would be on a pullback down to that level with a stop placed under it. A break back below $195 could negate the forecast for a continued move higher.

Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.

No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!

Good luck!

Christian Tharp, CMT

@cmtstockcoach