Frontdoor, Inc. engages in the provision of home service plans. Its service focuses on water heaters, garbage disposals, doorbells. smoke detectors, ceiling fans, central vacuums, refrigerators, dishwashers and trash compactors.
Take a look at the 1-year chart of Frontdoor (NASDAQ: FTDR) with the added notations:
FTDR has formed an important level of support at $42 (green) over the past several months. After finishing up a recent rally, the stock now looks like it is falling back down to that support. If the $42 level were to break, lower prices should follow for FTDR.
The Tale of the Tape: FTDR has key support at $42. A trader could enter a long position at or around $42 with a stop placed under the level. If the stock were to break below the support, a short position could 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!
Christian Tharp, CMT