DSW Inc. operates as a branded footwear and accessories retailer in the United States. The company operates in two segments, DSW and Affiliated Business Group. It offers a range of brand name dresses, casual and athletic footwear, and accessories for women and men through its DSW stores and dsw.com. The company also provides kids shoes; and handbags, hosiery, jewelry, and other accessories.
Take a look at the 1-year chart of DSQ (NYSE: DSW) below with the added notations:
DSW finished last year and started this year on a sour note. However, since bottoming in May, the stock has stabilized and has been working its way higher. Starting at the end of August, DSW has made a habit of finding resistance just under the $32 level, which was also support back in the spring. A break back above $32 should result in higher prices for the stock.
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The Tale of the Tape: DSW has a key level at $32. A trader could enter a long position on a break above $32 with a stop placed under the level. However, if traders are bearish on the stock, or the market overall, a short trade could be made at the $32 level 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!
Christian Tharp, CMT
Follow me on Twitter: @cmtstockcoach