SeaWorld Entertainment Inc (NYSE: SEAS)

SeaWorld Entertainment, Inc. operates as a theme park and entertainment company in the United States. The company operates marine-life theme park under the SeaWorld brand name in Orlando, San Antonio, and San Diego; Busch Gardens theme parks, which are family-oriented destinations with foreign geographic settings in Tampa and Williamsburg; Discovery Cove marine-life theme park in Langhorne; and Sesame Place, a seasonal park in Langhorne. It also operates water parks under the Aquatica brand name in Orlando, San Antonio, and San Diego; under the Adventure Island name in Tampa; and under the Water Country USA name in Williamsburg. In addition, the company operates its theme park under Shamu and Sea Rescue brand names. It owns and operates 11 destination and regional theme parks.

Take a look at the 1-year chart of SeaWorld (NYSE: SEAS) below with my added notations:

1-year chart of SeaWorld (NYSE: SEAS)

For the past several months SEAS has essentially been trading in a large, sideways range. More recently, the stock has created an important level of resistance to watch at $20 (red). SEAS has already tested that level a couple of times since the end of October. A break above that $20 level should lead to higher prices for the stock.

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The Tale of the Tape: SEAS has a key level of resistance at $20. A long trade could be entered on a break through that level. However, if you are bearish on the stock, a short trade could be made on any rallies up to $20.

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