Acuity Brands, Inc. provides lighting and building management solutions and services for commercial, institutional, industrial, infrastructure, and residential applications in North America and internationally.
Take a look at the 1-year chart of Acuity (NYSE: AYI) below with the added notations:
During the final 4 months of 2017 and 1st month of 2018, AYI had formed a major support level at $155 (red). At the end of January that level broke, which led to expected lower prices. Since the breakdown, the $155 level has acted as resistance for both rallies.
The Tale of the Tape: AYI has a key level at $155. Traders could enter long positions on a break back above $155, with a stop placed under the level. However, traders that are bearish on the stock might have an opportunity to get short if AYI tests $155 again.
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