RetailMeNot, Inc. operates a digital coupon marketplace. Its marketplace connects consumers with retailers and brands. The company owns and operates digital coupon Websites, including RetailMeNot.com in the United States; VoucherCodes.co.uk in the United Kingdom; and Bons-de-Reduction.com, Poulpeo.com, and Ma-Reduc.com in France. Its Websites, mobile applications, email newsletters, alerts, and social media presence enable consumers to search for, discover, and redeem relevant digital offers from retailers and brands for various product categories comprising clothing and shoes, electronics, health and beauty, home and office, travel, food and entertainment, and personal and business services.
Take a look at the 1-year chart of RetailMeNot (Nasdaq: SALE) with the added notations:
After finishing its May to August drop, SALE started bouncing on top of a clear $8 support (green) over the next 6 months. Now that the stock appears to be falling back down to that support level again, traders should be able to expect some sort of bounce. However, if the $8 support were to break, lower prices should follow.
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The Tale of the Tape: SALE has a key level of support at $8. A trader could enter a long position at $8 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!
Christian Tharp, CMT
Follow me on Twitter: @cmtstockcoach