Take a look at the 1-year chart of Youku (NYSE: YOKU) below with added notations:
YOKU skyrocketed back in the spring, but after a persistent selloff in June, July and August, the stock started trading sideways over the past month. While in the sideways move, the stock has formed a key pair of price levels that are worth watching. YOKU has a current resistance at $18 (red), which has been both prior support and resistance earlier in the year, and a $16 support (green) that has also been both support and resistance in the past. At some point one of those levels will have to break.
The Tale of the Tape: YOKU is trading inside a trading range. The possible long positions on the stock would be either on a pullback to $16 or on a breakout above $18. The ideal short opportunity would be on a break below $16.
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