Brookdale Senior Living, Inc. (NYSE: BKD)

Brookdale Senior Living Inc. operates senior living communities in the United States. It offers independent living, assisted living, Alzheimer’s and dementia care, rehabilitation and skilled nursing, continuing retirement care, and life care services for residents. The company also provides Care3 Wellness programs, which include education, rehabilitation, and exercise; and massage therapy, chair yoga, and Tai Chi, as well as health education and group exercise classes. Brookdale Senior Living Inc. was incorporated in 2005 and is based in Brentwood, Tennessee.

To review Brookdale’s stock, please take a look at the 18-month chart of BKD (Brookdale Senior Living, Inc.) below with my added notations:

18-month chart of BKD (Brookdale Senior Living, Inc.)

It’s easy to see why traders could think BKD was never going anywhere since the stock just went sideways all year in 2013. However, over that period of time the stock had also created a strong level of resistance at $30 (blue), which constituted a 52-week high resistance. A break through that level would most likely mean higher prices for the stock. As you can see from the chart, BKD finally broke higher this past Friday on massive volume.

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The Tale of the Tape: BKD broke out to a new 52-week high. A long trade could be made near $30 with a stop placed below that level. A break back below $30 would negate the forecast for a continued move higher.

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

Follow me on Twitter: @cmtstockcoach