Todays Big Stock: Buckle, Inc. (NYSE: BKE)

The Buckle, Inc. is a retailer of casual apparel, footwear, and accessories for men and women. The Buckle operates approximately 400 retail stores in 41 states throughout the continental United States under the names Buckle and The Buckle. The company markets a selection of casual apparel including denims, other casual bottoms, tops, sportswear, outerwear, accessories, and footwear. The company offers denims from brands such as Big Star, Big Star Vintage, Miss Me, MEK, Rock Revival, Silver Jeans and Buffalo Jeans. Other brands include Hurley, Billabong, Affliction, Sinful, Archaic, Obey, Roar, RVCA, Fox, and Fossil. The Buckle, Inc. purchases products from manufacturers within the United States, as well as from agents who source goods from foreign manufacturers.

Before discussing potential trading opportunities, please take a look at the 2-year chart of BKE (The Buckle, Inc.) below with my added notations:

Since I have followed BKE for quite a while, I knew of important prices that were not only important now, but also went back more than a year. I chose the 2 yr chart so that you could see the long-term importance of (2) specific prices on BKE. First, please notice the $40 level (blue-resistance/red-support). Underneath the $40, you will notice that BKE has a long-term support at $35 (green).

The Tale of the Tape: BKE has an important level at $40, which is where the stock is currently sitting. A long play could be made at this $40 level, or a short trade if the stock were to break that level. If a trader takes a small loss on a long play at $40, the next long play could be made on a drop to the $35 level. A break below the $35 could mean a significant drop for BKE and another short should be made.

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