Hungry For A Trade? Grab A Slice Of This Short Play
Yesterday, we spoke about finding stocks that are relatively weak in comparison to the rest of the market. Today, we have a similar set up to take a look at.
Our stock play of the day comes from the pizza giant, Domino’s Pizza (DPZ), which has not only approached a key level of support, it has broken it in a pretty meaningful way. This kind of break, as you can see if you look at the DPZ chart, implies that one could prepare to take a short position as lower prices could be incoming.
This 300 level has acted as a meaningful level of support several times in the past, dating all the way back to late last year, increasing its strength as support. We even had a false breakdown of this level before the stock reversed course and started to climb once again.
Now, you could make the case that this could be yet another false breakdown, however, look at the candle that broke through 300. That was a meaningful break as the candle is much larger, indicating much more selling volume during that period of time.
This is a stronger break that the previous one and one that points to a bit more follow through than the last. The price target for this breakdown would at the very least be 291 as you can see that’s where price last found some support after breaking 300.
Again, the true test will be if the market finds strength and DPZ does not. If the market continues to pull then DPZ will likely be one that falls harder than the rest of the market. So, for those looking for a short play, keep this one on your radar.
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