Breakout or Breakdown for PDM?
Tim Bourquin highlights this stock's latest test at longtime resistance, and two ways traders can approach it.
Piedmont Office Realty Trust (PDM) recently crossed above its 200-day moving average, and looks to be testing a price level it previously tested no less than four times since late April.
Here is a recent daily chart:
Traders can look at this in two ways:
- An aggressive trader can short this stock into resistance at around $17.50 if they believe it will, once again, fail to break through that level.
- Breakout traders can wait for a closing daily bar above $17.50 and go long with a stop around $17.25 (depending on your risk tolerances).
Looking back further on a weekly chart, the previous high of just under $20 will make for the next resistance level.
If it breaks through that as well, the sky is the limit and a trailing stop of around 50 cents would be appropriate.