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.

Please take a look at the 1-year chart of WTW (Weight Watchers International) below with my added notations:

1-year chart of WTW (Weight Watchers International)

WTW has held a very important level of support at $19.50 (blue) since March. No matter what the market has done lately, WTW has not broken $19.50. Now the stock is approaching $19.50 again and that might provide another bounce higher. However, the stock’s insistent downtrend against a rising market implies an eventual breakdown.

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The Tale of the Tape: WTW has a key level of support at $19.50. A trader could enter a long position at $19.50 with a stop placed under the level. If the stock were to break below the support, a short position would be recommended instead.

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