Crocs, Inc is a designer, manufacturer and distributor of footwear and accessories for men, women and children. At year-end 2011, Crocs sold its products in more than 90 countries through domestic and international retailers and distributors and directly to end-user consumers through its company-operated retail stores, outlets, kiosks and web stores. It also offers accessories and apparel, which generated approximately 3.7% of its total revenues during the year 2011. Its footwear products are divided into four product offerings: Core-Comfort, Active, Casual and Style. The Core product offering primarily includes molded products that are derivatives of the original Crocs Classic designs. The Active product offering includes sport inspired products and footwear suited for activities, such as boating, walking, hiking and even recovery after workouts. The Casual product offering includes sporty and relaxed styles. The Style product offering includes stylish products.
To analyze Croc’s stock for potential trading opportunities, please take a look at the 1-year chart of CROX (Crocs, Inc.) below with my added notations:
CROX interests me because of the one simple price level at $18. Not only can you see the $18 support (green), but $18 has also been a common resistance (red) as well. So, the $18 price is key to this stock. If you are bearish, you might short CROX on any rallies up to $18. However, if you’re bullish on the stock you would want to see the stock break through the $18 resistance.
The Tale of the Tape: CROX presents a couple of very simple trading opportunities based on its key level of $18. A short position could be entered at the $18 resistance with a stop above that level, or a long play could be made on a break above $18 if that should happen.
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