Avon Products, Inc. manufactures and markets beauty and related products worldwide. It offers beauty products, such as skincare, and personal care products, as well as fragrances and color cosmetics; and fashion and home products consisting of jewelry, watches, apparel, footwear, accessories, gift and decorative products, housewares, entertainment and leisure products, children’s products, and nutritional products. The company markets its products through direct selling and independent representatives.
Take a look at the 1-year chart of Avon (NYSE: AVP) below with the added notations:
AVP has been declining persistently over the course of the past year.
In addition, the $7 price level (red) has become very important to the
stock starting from the beginning of 2015. Not only was $7 a key support
back in January and March, but that level has also been resistance once
AVP fell below it.
The Tale of the Tape: AVP has a key level at $7. A
trader could enter a long position on a break above $7 with a stop
placed under the level. However, if traders are bearish on the stock, a
short trade could be made instead at the $7 resistance.
Friday, August 14, 2015
But the most recent rally in AMZN stock, which came after the company’s better-than-expected earnings report, looks to have exhausted the bulls and could now offer active investors and traders a short-side trade to profit from a mean-reversion move to the downside. (more)
Markets that have a decent sized speculative short position are always subject to bouts of sharp price rises as shorts scurry for cover. The question is not whether or not shorts are covering – they are. The question is, “Are there large numbers of specs who are willing and eager to assume NEW LONG positions?”
For without that, the rally has no staying power but will fizzle out once the weaker-handed shorts are run out. (more)