Vista Outdoor Inc. designs, manufactures, and markets consumer products for outdoor sports and recreation markets worldwide.
Take a look at the 1-year chart of Vista (NYSE: VSTO) below with the added notations:
Since the January drop, VSTO has been trading overall sideways. During that time, you will see that the level of $20 (blue) has commonly appeared as both support and resistance. The past few weeks have seen the stock start to come back down to that $20 level again, thus presenting a potential trading opportunity.
The Tale of the Tape: VSTO has a key level at $20. A trader could enter a long position on a pullback down to that level with a stop placed under it. However, if traders are bearish on the stock, a short trade could be made instead on a break back below $20.
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