Conn’s Inc (NASDAQ: CONN)

Conn’s, Inc. operates as a specialty retailer of durable consumer goods and related services in the United States. It operates through two segments, Retail and Credit.

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

1-year chart of Conn’s (NASDAQ: CONN)

CONN has been trending higher for the past year. Recently, the stock created a 52-week high resistance area at $37.50 (red), while also climbing a short-term trendline of support (green). At some point, CONN will have to break either the $37.50 resistance or the trendline.

The Tale of the Tape: CONN is sitting just under resistance. A long trade could be made on a break above the $37.50 level, or on a pullback to the trendline, with a stop placed below that level. A trendline break likely means lower prices.

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