Papa John’s International, Inc. operates and franchises pizza delivery and carryout restaurants under the Papa John’s trademark in the United States and internationally. It operates through five segments: Domestic Company-Owned Restaurants, North America Commissaries, North America Franchising, International Operations, and All Others.
Take a look at the 1-year chart of Papa (NASDAQ: PZZA) with the added notations:
PZZA has a major level of support at $55 (green). The stock recently dove below that level, but rallied strongly in order to hold the line. However, if the $55 support level were to finally break, lower prices should follow.
The Tale of the Tape: PZZA has key support at $55. A trader could enter a long position at or around $55 with a stop placed under the level. If the stock were to break below the support, a short position could be entered instead.
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