DSW Inc. (NYSE: DSW)

DSW Inc., together with its subsidiaries, operates as a branded footwear and accessories retailer in the United States. The company operates through two segments, DSW and Affiliated Business Group. It offers dresses, casual and athletic footwear, and accessories under various brands for women, men, and kids. It also provides handbags, hosiery, jewelry, and other accessories.

Take a look at the 1-year chart of DSW, Inc. (NYSE: DSW) with the added notations:

1-year chart of DSW, Inc. (NYSE: DSW)

DSW has been through some pretty big ups and downs over the past year. Along the way, the stock has managed to bounce on top of the $20 support (green) several times. Now that the stock has fallen back down to that support area again, traders should be able to expect some sort of bounce. However, if the $20 support level breaks, lower prices should follow.

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The Tale of the Tape: DSW has a key area of support at $20. A trader could enter a long position at $20 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