FLWS has been range trading since the earnings reported in April. We experienced one false breakout back in early June, but it was quickly thrown back into the range. Disregarding the intra-day break in September, we are in the middle of a second breakout attempt, which started with the October earnings. This break experienced a brief throwback before continuing on the bullish trend. A throwback tends to forewarn a weaker breakout.
Looking at RSI and ADX, we see bullish trends in both. There is a lack of volume accompanying this break. Breakouts can be valid without an accompanying increase in volume.
Fundamentally, FLWS tends to have its bests sales and revenues in the 4th quarter. This breakout coincides with the start of the 4th quarter. Optimistically this bullish trend could last into the holiday season.
Looking at the factors of the trade, I believe a half position and tighter stop are warranted.
4hr and Weekly charts provided for perspective
Looking at RSI and ADX, we see bullish trends in both. There is a lack of volume accompanying this break. Breakouts can be valid without an accompanying increase in volume.
Fundamentally, FLWS tends to have its bests sales and revenues in the 4th quarter. This breakout coincides with the start of the 4th quarter. Optimistically this bullish trend could last into the holiday season.
Looking at the factors of the trade, I believe a half position and tighter stop are warranted.
4hr and Weekly charts provided for perspective
Trade active
Trade closed: stop reached:
Breakout turned out to be false. Another important lesson on why risk management is so important. Stock will be rotated back to watchlist to watch for future breakouts.
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