Aaron’s, Inc. retails consumer electronics, computers, residential furniture, household appliances, and accessories. It engages in the lease ownership, lease and retail sale of products such as widescreen and liquid crystal display televisions, computers, living room, dining room and bedroom furniture, washers, dryers, and refrigerators. The company operates through the following business segments: Sales and Lease Ownership, Progressive, DAMI, Franchise, and Manufacturing.
Take a look at the 1-year chart of Aaron’s (NYSE: AAN) below with the added notations:
Over the course of the past 7 months, AAN has formed an important level to watch at the $60 (blue) mark. That level was support back in the summer and fall, and now that the stock is below $60, it has been tested it as resistance multiple times as well.
The Tale of the Tape: AAN has a key level at $60. A trader could enter a long position on a break above that level with a stop placed under it. However, if traders are bearish on the stock, a short trade could be made instead on a rally up to the $60 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