L Brands Inc (NYSE: LB)

L Brands, Inc. operates as a specialty retailer of women’s intimate and other apparel, beauty and personal care products, home fragrance products, and accessories. The company operates in three segments: Victoria’s Secret, Bath & Body Works, and Victoria’s Secret and Bath & Body Works International.

Take a look at the 1-year chart of L (NYSE: LB) below with my added notations:

During the past eight months, LB has formed a level of resistance to watch at the $37.50 (red) mark. The stock has tested that mark multiple times since the end of March. A close above that $37.50 level would most likely lead to higher prices for LB.

The Tale of the Tape: LB has a key level of resistance at $37.50. A long trade could be entered on a break through that level. However, if you are bearish on the stock, a short trade could be made on any rallies up to $37.50.

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