Green Dot Corporation, together with its subsidiaries, operates as a technology-centric, pro-consumer bank holding company that provides personal banking for the masses. It offers prepaid debit card products and prepaid card reloading services in the United States, as well as mobile banking services with its GoBank mobile bank account offering. The company’s products include Green Dot MasterCard, Visa-branded prepaid debit cards, and various co-branded reloadable prepaid card programs; Visa-branded gift cards; and MoneyPak and swipe reload proprietary products, which enable cash loading and transfer services through its Green Dot Network.
Please take a look at the 1-year chart of Green Dot (NYSE: GDOT) below with my added notations:
GDOT had held an important level of support at $20 (blue) for the last 9 months, and that level had also been a previous resistance. After rallying back up near $22 earlier this month, the stock came back down to $20 yet again. Yesterday GDOT finally closed below the $20 support and should be moving overall lower from here.
Join our new Linkedin Group by clicking the link below:
The Tale of the Tape: GDOT had a key level of support at $20. Now that the stock has broken support, a trader might want to enter a short trade at or near the $20 level with a stop placed above that level. A break back above $20 could negate the forecast for a move lower.
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
Follow me on Twitter: @cmtstockcoach