Petco Health & Wellness Company, Inc. engages in the provision of pet health and wellness services. It offers grooming, as well as in-store and online training.
Take a look at the 1-year chart of Petco (NASDAQ: WOOF) below with the added notations…
Chart of WOOF provided by TradingView
Over the past few months, WOOF has created a strong level of resistance right at the $20 mark (red). The stock has made it back up to that level again, and an eventual breakthrough could lead to a leg higher for the stock.
The Tale of the Tape: WOOF has an important level of resistance around $20. A long trade could be entered on a breakthrough of that level, with a stop placed below it. However, if you are bearish on the stock, a short trade could be made on any rallies up to the $20 area.
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
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