RH, together with its subsidiaries, operates as a retailer in the home furnishings. It offers products in various categories, including furniture, lighting, textiles, bathware, décor, outdoor and garden, tableware, and child and teen furnishings.
Take a look at the 1-year chart of RH (NYSE: RH) below with my added notations:
During the past few months, RH has formed an important level of resistance to watch at the $120 (red) mark. The stock looks like it may be on its way back up to that level again, and a solid close above that $120 should lead to much higher prices for RH.
The Tale of the Tape: RH has a key level of resistance at $120. A long trade could be entered on a break through that level. However, if you are bearish on the stock, a short trade could be made on any rallies up to $120.
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