Weight Watchers International, Inc. (NYSE: WTW)

Weight Watchers International, Inc. provides weight management services in North America, the United Kingdom, Continental Europe, Australia, New Zealand, and internationally. The company operates through North America, United Kingdom, Continental Europe, and Rest of World. It offers a range of products and services comprising nutritional, exercise, and behavioral tools and approaches. The company also provides various products, including bars, snacks, cookbooks, food, and restaurant guides with PointsPlus values, Weight Watchers magazines, PointsPlus calculators, and fitness kits, as well as ActiveLink, an activity monitor and Web experience that tracks activity throughout the day. In addition, it offers Internet subscription products, such as Weight Watchers Online that offers online and mobile content, functionality, resources, and interactive Web-based weight management plans; and Weight Watchers eTools, an Internet weight management product, which allows users to manage the day-to-day aspects of weight management plans online or via their mobile devices, discover different food options, and keep track of their weight management efforts.

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:

1-year chart of WTW (Weight Watchers International, Inc.)

WTW has been in a persistent downtrend since August of last year. During that time the stock has also formed an important trend line of resistance (blue). Always remember, any (2) points can start a trend line, but it’s the 3rd test and beyond that confirm its importance. So, WTW obviously has a very important trendline of resistance that currently sits near $25.

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The Tale of the Tape: WTW is currently stuck under a down trending resistance. A break above resistance should mean higher prices, thus a long trade could be made. Short traders might look to enter a trade at the resistance.

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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