One of our favorite stocks to trade has finally come up to an old resistance level, signaling there could be another retreat from this level. Given the weakness of the market after yesterday’s FOMC meeting, this could be another rejection in the making.
Couple that with the MACD sell signal and the fact that we have a momentum divergence, a trade to the downside could end up being the highest probability trade. This divergence means the buying pressure that pushed the stock up to this resistance level has slowed and is beginning to reverse course.
If the weakness in the market continues, traders should keep this trade on their list as what could be their next big trade.
Learn to find these levels for yourself when you join The Profit Machine. There, you’ll learn all about my favorite stocks, setups, strategies, and plenty more. You’ll also be invited to weekly webinars where I answer questions and go over important trading lessons, like the one in today’s article. The best part, you’ll also receive live trade alerts. Not only will you get a world-class education, but you’ll earn while you learn.
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Good Luck With Your Trading!
Christian Tharp, CMT
This post was originally published on Wealthpop