Aaron’s, Inc. operates an omni-channel provider of lease-purchase solutions. It operates through five segments: Sales and Lease Ownership, Progressive, DAMI, Franchise, and Manufacturing. The company engages in the sale, lease ownership, and specialty retailing of furniture, consumer electronics, home appliances, and accessories.
Take a look at the 1-year chart of Aaron’s (NYSE: AAN) below with the added notations:
AAN has made a habit of hitting the $40 level as resistance (blue), and each time the stock has broken above that mark, higher prices have followed. Earlier this week AAN broke back above the $40 level, which should now act as support, and higher prices should be coming again.
The Tale of the Tape: AAN has a key level at $40. 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 $40.
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