Falling Like Dominos, Watch This Trade Level
Dominos Pizza Inc (DPZ) has been one of the best-performing stocks in the market up until early October 2020. The stock peaked on October 5th. 2020 at $435.58 a share. Since that pivot high, the shares have steadily declined and currently trade around $384.00 a share. Traders should note that DPZ stock is now trading below its 50-day moving average. This puts the stock in a weak technical position on the daily chart. Late week, DPZ stock tested the 200-day moving average around the $370.00 level, so far that level has held up as support. A close below that key support level would likely trigger another sell signal in the stock.
Traders should watch the $340.00 area as a major support level for the stock. This important support level is where the stock broke out of a choppy consolidation base in mid-April 2020. This support level should be defended when initially tested. It is also important to note that this stock trades about $300,000 shares a day and only has 39.4 million shares outstanding. This tells me that the stock can experience wide price swings in the stock price, so be patient and wait for the level.
(Click on image to enlarge)
Disclaimer: All comments made by InTheMoneyStocks, LLC and its subsidiaries, instructors, and representatives are for educational and informational purposes only and should not be construed as ...
more