SBA Communications Corporation owns and operates wireless communications infrastructure primarily in North, Central, and South America. It operates through two businesses, Site Leasing and Site Development Services. The Site Leasing business leases antenna space on its multi-tenant towers and other structures to various wireless service providers under long-term lease contracts. The Site Development Services business offers wireless service providers and operators assistance in developing their networks.
Take a look at the 1-year chart of SBA (NASDAQ: SBAC) below with the added notations:
SBAC is basically trading right where it was back towards the end of June 2016. However, during that 8-month stretch, the stock has been as high as $118, and as low as $96. Also during that time, SBAC created a key price level at $117.50 (blue) that has provided both support and resistance for the stock. Now that SBAC is pulling back to that level again, traders should expect a bounce.
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The Tale of the Tape: SBAC has a key level at $117.50. Traders could enter a long position on a pullback to $117.50, with a stop placed under that level. Traders that are bearish on the stock could enter a short position on a break below that level 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