Vera Bradley, Inc., together with its subsidiaries, designs, manufactures, and sells handbags, accessories, and luggage and travel items for women of all ages under the Vera Bradley brand. The company offers totes, crossbodies, satchels, clutches, and backpacks bags, as well as baby bags and lunch bags; accessories, such as wallets, wristlets, eyeglass cases, jewelry, and scarves; and travel products comprising rolling luggage, cosmetics, and travel and packing accessories, as well as travel bags consisting of duffel and weekend bags. It also provides home products, including mugs and tumblers, as well as textiles products, such as aprons, beach towels, throw blankets, and comforters; offers apparel/footwear, stationery, merchandising, and gift card products; and licenses its products. The company sells its products through two segments, Direct and Indirect.
Take a look at the 1-year chart of Vera (NASDAQ: VRA) below with my added notations:
VRA has formed a key support level at $12 (green) over the past two months, which had also been a prior resistance back in July. In addition, the stock is declining against a short-term, down trending resistance level (red). These two levels combined have VRA stuck within a common chart pattern known as a descending triangle. Eventually, the stock will have to break one of those two levels.
Join our new Linkedin Group by clicking the link below:
The Tale of the Tape: VRA is sitting within its triangle pattern. A short trade could be made on a break of support or on a rally up to resistance. A long trade could be made at support or on a break through the triangle resistance.
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