Chewy, Inc. engages in the provision of pure-play e-commerce business. It supplies pet medications, food, treats and other pet-health products and services for dogs, cats, fish, birds, small pets, horses, and reptiles.
Take a look at the 1-year chart of Chewy (NYSE: CHWY) below with the added notations:
During that past couple of months, CHWY has formed an important resistance level around $52 (red), and another key level in the $46 (green) area. If the stock declines further, $46 could provide support, while a reversal and break above $52 could signal another leg higher.
The Tale of the Tape: CHWY has key levels at $52 and $46. A trader could enter a long position on a pullback down to $46, or a break above $52, with a stop placed under the level of entry. However, if traders are bearish on the stock, a short trade could be made on a break below the $46 mark.
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
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CHWY shares were trading at $50.26 per share on Wednesday morning, up $1.35 (+2.76%). Year-to-date, CHWY has gained 73.31%, versus a -2.77% rise in the benchmark S&P 500 index during the same period.
About the Author: Christian Tharp, CMT
Christian is an expert stock market coach at the Adam Mesh Trading Group who has mentored more than 4,000 traders and investors. He is a professional technical analyst that is a certified Chartered Market Technician (CMT), which is a designation awarded by the CMT Association. Christian is also the author of the daily online newsletter Todays Big Stock. More...
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