Swing Trader

Good morning traders. A short trade in Moody’s Corp. (MCO) is profiled below.

The blue horizontal lines on the chart above define the lower price range MCO fell into six trading days ago. The stock subsequently reversed back higher to test the top side of the range.

We’re looking for this first test of resistance to hold and for the MCO to reverse lower.

An undercut of Friday’s low will trigger the short entry with a relatively tight stop just over the top of Friday’s high. The potential for price exploration to the bottom of the illustrated price range gives this trade a better than 5.0 to 1.0 reward to risk ratio.