Life Time Fitness, Inc. engages in designing, building, and operating sports and athletic, professional fitness, family recreation, and spa centers. It offers programs in various areas, such as group fitness, yoga, swimming, running, racquetball, squash, tennis, pilates, mixed combat arts, kids activities and camps, adult activities and leagues, rock climbing, cycling, basketball, personal training, weight loss and nutrition initiatives, spa, medi-spa, and chiropractic service areas. The company, through its LifeCafes and lifetimefitness.com, provides nutritional products, including men’s and women’s performance multivitamins, omega-3 fish oil, joint maintenance formulation, lean source soft gels, and whey protein isolate, as well as FastFuel Complete, a meal replacement product. In addition, it publishes a magazine that includes articles on nutrition and healthy eating, health and wellness, exercise and active adventure, stress-management, personal development, and other quality-of-life topics under the Experience Life name; and operates a full-service restaurant. Further, the company produces athletic events comprising running, cycling, and triathlon events from entry-level to ultra-endurance, as well as offers health assessments services.
To analyze Life Time’s stock for potential trading opportunities, please take a look at the 1-year chart of LTM (Life Time Fitness, Inc) below with my added notations:
I like LTM’s chart because of the one simple level at $48. Not only can you see the $48 support (green) from earlier in the year, but the $48 resistance (red) has been very obvious over the last (3) months and again back in December and January. So, the $48 price is key to this stock. If the stock were to move above $48, the $52 level (blue) would come back into play as well.
The Tale of the Tape: LTM presents a couple of very simple trading opportunities based on its key level of $48. A short position could be entered on a rally up to the $48 resistance with a stop above that level. A long play could be made on a break above $48 with an expectation of a run to $52.
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