Burlington Stores Inc (NYSE: BURL)

Burlington Stores, Inc. operates as a retailer of branded apparel products in the United States. The company offers fashion-focused merchandise, including women’s ready-to-wear apparel, accessories, footwear, menswear, youth apparel, coats, and gifts, as well as baby, home, and beauty products.

Take a look at the 1-year chart of Burlington (NYSE: BURL) with the added notations:

BURL had established an important level of support at $145 (red) over the course of the past nine months. However, last week saw the stock break below that support, which implies lower prices for BURL. The $145 level would now be expected to act as resistance on any future rallies.

The Tale of the Tape: BURL broke a key level of support at $145. A trader could enter a short position on any rallies up to or near $145 with a stop placed above the level. If the stock were to break back above the $145 level, a long position might 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