Weight Watchers International, Inc. (NYSE: WTW)

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Weight Watchers International, Inc. engages in the provision of weight management services primarily in North America, the United Kingdom, Continental Europe, Australia, and New Zealand. It offers various services and products that are built upon its weight management plans, including nutritional, exercise, and behavioral tools and approaches. The company also sells a range of products, including bars, snacks, cookbooks, food, and restaurant guides with PointsPlus values, Weight Watchers magazines, and PointsPlus calculators In addition, it provides Internet subscription products comprising Weight Watchers Online that offers online content, functionality, resources, and interactive Web based weight management plans; and Weight Watchers eTools, an Internet weight management product that allows users to manage the day-to-day aspects of weight management plans online, discover different food options, stay informed, and keep track of their weight management efforts. Further, the company offers iPhone and Android applications, which provide subscribers with access to a suite of weight-loss tools, as well as helpful content; and iPad application that offers subscribers with access to a set of recipe tools.

To review Weight Watcher’s stock, please take a look at the 1-year chart of WTW (Weight Watchers International, Inc.) below with my added notations:

WTW

Over the last (4) months WTW has created a couple of short-term price levels to watch. First, WTW has formed a clear resistance level at $57.50 (red). In addition, the stock has also been forming an uptrending support level (blue). These two levels combined have WTW stuck within a common chart pattern known as an ascending triangle that will eventually have to break one way or another.

The Tale of the Tape: WTW is currently stuck between its uptrending support and the $57.50 resistance. A long trade could be made on a break above $57.50. On the other hand, you could enter a short trade on WTW on a rally up to $57.50 or if the stock breaks below the uptrending support level, currently near $50.

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