This Is The Trade To Make On This Walgreens (WBA) Setup
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Looking at our latest options trade idea, Walgreens (WBA) looks to be providing us with one of our simple, straight forward setups we like to see so much. A clear resistance or support level helps us eliminate the rest of the noise caused by what else is going on in the market.
WBA has drawn a clear line in the sand at around 22.5, which also could be a level that may get taken out if the stock gets some more bullish momentum. The momentum needed to get the stock to break this resistance level would likely be able to take the stock all the way back up toward 25 on a good push.
However, being that this is resistance, you would want to jump on this one with both feet until you had confirmation of a break higher. This is to protect as much of your capital as possible and make sure you’re managing your risk properly.
Should the resistance level be too strong, price would likely reject off this level and be sent lower as it fails to go higher. This doesn’t totally invalidate one trade or another, traders will just want to keep a close eye on price action in order to see what price will do.
If price stalls out at this level and struggles to make higher highs, you may want to be cautious. If we get an overshoot of this level, traders may want to look to enter the bullish side of the trade if there is a pull back to this resistance now turned support level. These are the likely scenarios for what will happen to WBA at this level, so keep it on watch as we wrap up the week.
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