Why This Setup Will Require You To Hone This One Trading Skill
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Anheuser-Busch (BUD) has formed a pretty solid range between two key levels and has been bouncing around between the two of them for some time. If you pull up the chart, you see a pretty straight forward channel forming. This rectangle pattern that has formed is between 59 to the top side and 55 on the bottom.
If either of these two levels were to be broken, a trade could be made looking for some continuation in either direction. For instance, a break of 59 could open us up for one of our favorite setup, a break and retest and a run up to 62, where we last saw some resistance.
Same with the trade to the downside, which if we get more weakness in the market like we did yesterday, could flush us right through 55 for a short play on the stock.
However, following along the theme of bouncing around these two levels, you can also look at these levels as support and resistance. Meaning, a bounce off the 55 market for calls and a rejection off 59 for a short play. Point is, there are a few different ways to play this stock currently, all of them depend on price action and the strength (or weakness) of the overall market.
Look for some trend in the overall market and then see how that translates to BUD. Does it follow the trend, or diverge from it entirely? Patience is a virtue, as they say, and that is especially true when it comes to trading. Be sure to cultivate it, especially with a trade like this.
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