Beyond The Biotech Space - GNC Holdings, Inc. (NYSE: GNC)

GNC falling towards support

GNC looked like it might have been rounding out a top from November through July, but then the stock shot to new highs instead. Now, the stock seems to be coming back down to that same July low. Over the past year, GNC has found support at that same $41.00 support (green) on multiple occasions. Traders could expect some sort of bounce if the stock reaches that support again. However, if the $41.00 support were to break, lower prices should follow.

The Tale of the Tape:

GNC has an important level of support at $41.00. A trader could enter a long position at $41.00 with a stop placed under the level. If the stock were to break below the support a short position could be entered instead.

Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.

No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!

Good luck!

The Biotech Trader

@TraderBiotech

Posted to The Biotech Trader on Aug 27, 2015 — 9:08 AM
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