SodaStream International Ltd., formerly Soda-Club Holdings Ltd., along with its subsidiaries, is engaged in developing, manufacturing and marketing home beverage carbonation systems and related products. Soda-Club International BV, wholly owned subsidiary of Soda-Club Enterprises N.V., manages the company’s operational activities, which is the wholly owned subsidiary of the company. SodaStream manufactures home beverage carbonation systems, which enable consumers to transform ordinary tap water into carbonated soft drinks and sparkling water. The company’s products include soda makers, CO2 refills, flavors and carbonation bottles.
Please review the 1 yr chart of SODA (SodaStream International Ltd) below with my added notations:
SODA has been trading mostly sideways for the last 7 months. During that time the stock has always held the level of support at $30 (blue), which you can see from the end of the October until December. No matter what the market has or has not done over the last 7 months, SODA has not broken below $30. The stock appears to be making its way back down to that support level for the first time since December.
The Tale of the Tape: SODA has an important support at $30. A long trade could be made on a pullback to $30 with a stop placed under that level. IF the stock were to break below $30, a short trade should be made with a stop placed above $30.
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!
Christian Tharp, CMT