Williams-Sonoma (WSM) recently broke through its $48.00 resistance level and is headed off into new price discovery. WSM has no negative price resistance to the left since this is a new price action. The goal in trading WSM long is to continue to ride the market strength. Trend is always your friend in trading.
GAP REVIEW
On March 20, 2013, WSM gapped up over its resistance line of $48.00, 6.7 times its average daily volume. This increased volume suggests institutional ownership on this gap up. Institutions don’t buy into an equity position just to flip it on a day trade. They look to ride into new highs for weeks to months.
KEY LEVEL
Gap Day High is Demand Level 1 at $50.00. Demand Level 2 is a prior pivot high at $51.00.
THE TRADE
Go long on a pullback into Level 1 or 2 demand areas. Target is between $70.00 to $80.00.
Disclosure: My Swing Newsletter Subscribers are long from $50.55 from March 25th, 2013.
