Green Plains Inc. produces, markets, and distributes ethanol in the United States and internationally. The company operates through four segments: Ethanol Production; Agribusiness; Marketing and Distribution; and Partnership. It produces and sells ethanol and co-products, such as wet, modified wet, or dried distillers to grains to feedlot, poultry, and rail markets, as well as for dairy and beef operations; and corn oil to biodiesel manufactures, as well as for feedlot and poultry markets.
Take a look at the 1-year chart of Green (NASDAQ: GPRE) below with added notations:
GPRE started from a $12 low back in February and rallied from that low up to a $28 high in October. After that, the stock hit that $28 as resistance again (green) in December, forming a clear 52-week high resistance at that level. Last week, the stock broke through that level, which should lead to even higher prices overall.
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The Tale of the Tape: GPRE broke its 52-week resistance at $28. The possible long position on the stock would be on a pullback down to that level with a stop placed under it. A break back below $28 could negate the forecast for a move higher.
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