The GEO Group, Inc. provides government-outsourced services specializing in the management of correctional, detention, and re-entry facilities, and the provision of community based services and youth services in the United States, Australia, South Africa, the United Kingdom, and Canada. It operates through four segments: U.S. Corrections & Detention, GEO Community Services, International Services, and Facility Construction & Design. The company owns, leases, and operates a range of correctional and detention facilities, including maximum, medium, and minimum security prisons; immigration detention centers; minimum security detention centers; and community based re-entry facilities.
Take a look at the 1-year chart of GEO (NYSE: GEO) with the added notations:
After declining steadily since April of 2015, GEO has bounced on a clear $25.50 support (green) during the most recent 2 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 $25.50 support were to break, lower prices should follow.
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The Tale of the Tape: GEO has a key level of support at $25.50. A trader could enter a long position at $25.50 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