Tuesday Morning Corporation (NASDAQ: TUES)

Tuesday Morning Corporation operates as a retailer of upscale decorative home accessories, housewares, seasonal goods, and gifts in the United States. The company offers various products, such as home d├ęcor, furniture, bed and bath, kitchen, toys, crafts, pets, and seasonal goods. It also provides a range of branded merchandise, including Peacock Alley, Sferra, Lenox, Waterford, and Hartmann. As of June 30, 2015, the company operated 769 discount retail stores in 41 states.

Take a look at the 1-year chart of Tuesday (NASDAQ: TUES) with the added notations:

1-year chart of Tuesday (NASDAQ: TUES)

After declining steadily for most of 2015, TUES started bouncing on top of a clear $5 support (green) during the most recent 5 months. Now that the stock appears to be testing that support level again, traders should be able to expect some sort of bounce. However, if the $5 support were to break, lower prices should follow.

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The Tale of the Tape: TUES has a key level of support at $5. A trader could enter a long position at $5 with a stop placed under the level. If the stock were to break below the support a short position could be entered 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