I am watching Sonic for a possible bearish swing trade, most likely with options. Because earnings come out AMC on Tuesday I will wait to reassess the trade on Wednesday morning.
I was tempted to enter the trade on Monday but feel there is too much risk being in the trade over earnings so I will wait.
Sonic is at a strong resistance level, it has been at this level two other times including the first time when it set the all-time high of $36.73, it dropped lower each time.
In the past 2 weeks, Sonic is up about 50% so it looks like it is due for a pullback. On the daily time frame, the price is quite a ways above the 10 day EMA which is at $33.73 and looking at the weekly time frame the price is extremely extended above the 10 week EMA which is at $29.12. Overall, in my opinion, Sonic is due for a pullback, the only unknown is how will earnings affect this?
I was tempted to enter the trade on Monday but feel there is too much risk being in the trade over earnings so I will wait.
Sonic is at a strong resistance level, it has been at this level two other times including the first time when it set the all-time high of $36.73, it dropped lower each time.
In the past 2 weeks, Sonic is up about 50% so it looks like it is due for a pullback. On the daily time frame, the price is quite a ways above the 10 day EMA which is at $33.73 and looking at the weekly time frame the price is extremely extended above the 10 week EMA which is at $29.12. Overall, in my opinion, Sonic is due for a pullback, the only unknown is how will earnings affect this?