Will FIVE Below go lower?

  • Company: Five Below
  • Stock Ticker: FIVE
  • Bias: Bearish

Long trades haven’t worked out very well in the last couple of weeks, so let’s try a bearish one instead. FIVE is currently testing the 200-day simple moving average and is only around 30 cents from breaking the large gap produced back in June.

I would look to put a sell stop limit order slightly below the low of the past 2 previous trading session at around $94.42. This will put this trade right in front of all the stops that are sitting near the gap from June which I believe we’ll see accelerated movement once that has been broken. The protective stop on this trade would be around $105.40.

I’ve chosen a larger than normal stop, but I would look to target filling the gap at $81 which is slightly over a 1:1 risk to reward ratio. This should give the trade enough room to breath and let the charts play out.

FIVE Chart

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