SUSS (Susser Holdings) looks have a lot of potential as a longer-term swing short trade. Based on my interpretation of both the daily & weekly charts, I would say that the 4 year, 700% run in this stock is in the terminal stages right now. I’m looking at SUSS as a long-term swing trade candidate with the potential for a nearly 50% drop from current levels. However, this trade idea has yet to trigger an entry & is only a trade setup at this time.
SUSS is currently flirting with a confluence of major support as the stock wedges higher with substantial divergences in place on both the daily & weekly time frames. The first major support would be the primary uptrend line generated off of the April 2010 lows. Not far below that SUSS has both horizontal support around the 57.50ish area as well as the 40 week/200 day exponential moving average, which currently comes in at 57.47. Although I often short trendline breaks, I will typically hold off if there is decent support not far below. An objective short entry would be on either any intraweek break below the Jan 26th reaction low of 57.26 (plus a penny or so) –OR- on a weekly close below both 57.26 and the 200-day/40-week ema. Using a weekly close when trading off of the weekly chart, as shown below, helps to reduced the chances of being stopped out, should the stock make a brief, intra-week break below support. The benefit of taking the intra-week break of support is that it may provide a better entry price, should the stock continue to move down sharply by the end of the week. Which entry criteria one chooses would depend on their own unique trading style and risk tolerance.
Click here to view the live weekly chart of SUSS
SUSS weekly April 9th