Take a look at the 1-year chart of Conoco (NYSE: COP) with the added notations:
COP declined into December of last year. When the stock finally bottomed, COP ended up finding support at $60.00 (green) over the next 7 months. Now that the stock appears to be falling back down to that support level again, traders should be able to expect some sort of bounce. However, if the $6o.00 support were to break, lower prices should follow.
The Tale of the Tape: COP has an important level of support at $60.00. A trader could enter a long position at $60.00 with a stop placed under the level. If the stock were to break below the support a short position could be entered instead.
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