Broadridge Financial Solutions, Inc. provides investor communications and technology-driven solutions for the financial services industry worldwide.
Take a look at the 1-year chart of Broadridge (NYSE: BR) with the added notations:
During the past six months, BR had formed a very important level of support at $120 (green). Yesterday saw the stock break below that support. Not only does that imply lower prices for BR, but the $120 level should now act as resistance on any future rallies.
The Tale of the Tape: BR broke a key level of support at $120. A trader could enter a short position on any rallies up to or near $120 with a stop placed above the level. If the stock were to break back above the $120 level, a long position might 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