PLCE is a stock that was recently analyzed in a Chart School, “Trade watch” newsletter. To review that article, please follow the link: http://www.themeshreport.com/trade-watch-plce/
Since analyzing PLCE for potential trading opportunities, the stock has made an important move. Please look at an updated chart of PLCE below:
As you can see, PLCE made a significant breakout on Friday. Not only did the stock break through the key resistance level of $50, but this is also a new 52-week high! In addition to the breakout, there was nice increase in volume on the day of the breakout. As the saying goes, “Volume equals validity”. In other words, a high increase in volume on a breakout adds credibility to the move.
The Tale of the Tape: PLCE has broken out through a key resistance level to a new 52-week high. This usually signals a new move higher is to come for the stock. You could enter the stock here, or wait for a pullback to the old $50 resistance in expectation of the same $50 level acting as new support. Either way, a stop below the $50 level would be advised in case the breakout fails.
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