Do your own research prior to making any investment/trading decisions.
This is a swing trade with a 4-8 week time frame based solely on a technical setup. In this particular case I’ve chosen to ignore the fundamentals (at my own peril, perhaps).
PSMT – The chart below shows significant resistance in the $15 – $16 range. There are four periods worthy of note with each marked by a circle. The initial two represent resistance. PSMT then broke out to the upside on increasing volume (great thing to see/be a part of). The resistance points then became support. January and early March saw the testing of this support hold strong which is exactly what one wants to see when using support/resistance. Since the breakout PSMT has been trading in two ranges: $15 – $19 and $15 – $21. As it stands now the name is coming back down to retest support. Adding to the mix is a head-and-shoulders setup taking place from March to May.
In my opinion this provides for a buyer to initiate a position in this name in the low-$15s with a target of $19 and a stop loss/exit point of $14.50. Assuming a conservative entry of $15.50 this yields an expected reward of $3.50 with anticipated risk of $1.00. What’s great about this situation is that if your long position is proven incorrect you can play the shortside head-and-shoulders confirmation.
As always, enjoy the interludes…
As always do your own research prior to making any investment/trading decisions.
