Pilgrim’s Pride Corporation (NASDAQ: PPC)

Pilgrim’s Pride Corporation engages in the production, processing, marketing, and distribution of fresh, frozen, and value-added chicken products to retailers, distributors, and foodservice operators in the United States, Mexico, and Puerto Rico.

Take a look at the 1-year chart of Pilgrim’s (NASDAQ: PPC) below with the added notations:

1-year chart of Pilgrim’s (NASDAQ: PPC)

After spending about 2 months resisting $30, PPC finally broke higher on route to a peak around $38. Along the way, the previous $30 resistance became support (blue) on two different occasions. PPC has fallen hard over the past month, and the $30 seems to have stopped the decline, for now.

The Tale of the Tape: PPC has a key level at $30. 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 $30.

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