Take a look at the 1-year chart of Yelp (NYSE: YELP) below with the added notations:
YELP has been consistently declining over the course of the past year. Over the most recent 3 months the $35 price level (blue) has become very important to the stock. Not only was $25 a key support back in August, but that level has also been hit as resistance a couple of times once he stock fell below it.
The Tale of the Tape: YELP has a key level at $25. A trader could enter a long position on a break above $25 with a stop placed under the level. However, if traders are bearish on the stock, a short trade could be made instead at the $25 resistance.
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