Tiffany & Co. (NYSE: TIF)

Tiffany & Co., through its subsidiaries, designs, manufactures, and retails jewelry and other items worldwide. Its jewelry products include fine and solitaire jewelry; engagement rings and wedding bands; and non-gemstone, sterling silver, and gold jewelry. The company also sells timepieces, leather goods, sterling silverware, china, crystal, stationery, fragrances, and accessories. In addition, it wholesales diamonds to third parties.

Take a look at the 1-year chart of Tiffany (NYSE: TIF) with the added notations:

1-year chart of Tiffany (NYSE: TIF)

Once TIF finished its August to January decline, the stock bounced off the $60 support (green) level on a multiple occasions. TIF fell back down to that support level again just this week, and it was expected to see some sort of bounce. However, if the $60 support ends up breaking, lower prices should follow.

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The Tale of the Tape: TIF has a key level of support at $60. A trader could enter a long position at $60 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