SKX (Friday's closing price - 22.00)

SKX has been on an impressive run since March when the stock got down to the 5.20 level. On Friday, the stock closed up at 22.00 and on 14-month high. It is likely the stock will continue to go higher on Monday and Tuesday as there is no immediate resistance nearby and the stock is expecting a bullish earnings report on Wednesday.

SKX shows very strong resistance from Jul07/Sep08, on a weekly closing basis, between 23.88 and 24.26 that is unlikely to get broken even with a bullish earning report.

On a weekly closing basis, resistance is very strong between 23.88 and 24.26 with 4 separate closes between 2007 and 2008. On a daily closing basis, resistance starts at 23.74 and gets stronger all the way up to 24.98. On a weekly closing basis, support is decent between 18.06 and 18.56, and very strong at 16.81. On a daily closing basis, support is decent at the psychological $20 level, decent to strong at 18.30-18.50, and strong between 16.46 and 16.83.

SKX is now into a strong congestion area between 18.50 and 24.50 that is also likely to be the trading range for the next few months, if not longer. With the stock on such a strong run and closing on a 14-month high last Friday, it is likely that the stock will get up into the high end of that congestion area this coming week.

The company is in the retail business and anything retail will have definite limitations while the unemployment numbers are high. Since unemployment is not likely to go down significantly for at least a year. Companies such as SKX will have trouble generating further upside at this time, especially after having seen more than a 400% rally over the past 7 months.

It is likely that the stock, once it reaches the upper limits of its 1-year trading range between July 07 and September 08, will see aggressive selling and get into another trading range for the next 3-6-months between $25 and $17. As such, any rallies this week will be opportunities to sell.

Sales of SKX between 22.90 and 23.40 and using a stop loss at 24.10 and having an objective of 17.36 will offer a 5-1 risk/reward ratio.

My rating on the trade is a 3.75 (on a scale of 1-5 with 5 being the highest probability).

My name is Tony and I am a chartist. I have been trading for close to 30 years. In the 80's I was a broker/trader/analyst for Merrill Lynch, Dean Witter, and Pru-Bache.

I offer an inexpensive chart evaluation service on stocks of your choice through membership to my newsletter, website, and message board.

“When or where do I get in? When or where do I get out? What is the trend for the next week? For the next 3 months? Where are the strong buyers and where are the strong sellers (based on past action)? What is the risk/reward ratio on my trade (based on chart objectives)? What looks good right now (chart-wise)?”

These are some of the questions that I try to answer through chart evaluation.

I offer a monthly service that includes a weekly newsletter with chart evaluations on 4 stocks that I believe have attractive chart patterns and good risk/reward ratios as well as 1 chart evaluation per week on a stock of your choice. Evaluations include entry and stop loss points as well as likely objectives. The service also includes membership to a message board where daily updates on all stocks and stock indexes are given. Cost of the service is only $27.95 per month. A 2-week Free Trial is offered. If you want a lesser package, I do offer one for $4.95 that only talks about the Stock Indexes.

If you are interested in learning more about the service, please check out my website address on the Yahoo message board profile area.