Burlington Stores Inc (NYSE: BURL)

Burlington Stores, Inc. is an off-price apparel and home product retailer. The firm offers women’s ready-to-wear apparel, accessories, footwear, menswear, youth apparel, baby, home, coats, beauty, toys and gifts. 

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

BURL turns down

Before the March drop, BURL had formed a very important support at $190 (red). After breaking that support, and losing around ½ its value, the stock rallied back up and nearly hit that same $190 level as resistance. That mark has become a key inflection point for BURL.

The Tale of the Tape: BURL has major resistance at $190. A trader could enter a short position on any rallies up to or near $190 with a stop placed above the level. If the stock were to break back above the $190 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