Signet Jewelers Ltd. (NYSE: SIG)

Signet Jewelers Limited engages in the retail sale of diamond jewelry, watches, and other products in the United States, Canada, Puerto Rico, the United Kingdom, the Republic of Ireland, and the Channel Islands.

Take a look at the 1-year chart of Signet (NYSE: SIG) below with the added notations:

1-year chart of Signet (NYSE: SIG)

After declining from its November peak into May, SIG has been trading mostly in a sideways move. During that time, you will see that the key level of $65 (blue) has commonly appeared as either support or resistance. SIG has regained that level, which should lead to higher prices.

The Tale of the Tape: SIG has a key level at $65. A trader could enter a long position on a pull back down to that level with a stop placed under it. However, if traders are bearish on the stock, a short trade could be made instead on a break back below $65.

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