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September 8 Chart of the Day - Smith and Wesson

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Smith and Wesson (SWBI) reported better-than-expected financial results on Thursday and their stock is trading about 10% higher today up near $12 a share.

"Since 1852 Smith & Wesson has empowered Americans with the freedom, equality, and security promised by the Declaration of Independence and guaranteed by the Bill of Rights. It is this sense of safety and security that frees us to pursue our goals and dreams, define our future, and fulfill the promise of America."

Yeah ok, but from a price action technical analysis perspective does any of that really mean anything to us?

Not really.

We're chartists and traders/investors that only focus on price action.

We can see on the monthly chart that price is significantly off its all time highs (ATH) of $39.61 back in the spring of 2021 and traded below $10 earlier this year.

So does this mean that a "bottom" has been defined?

Not necessarily as there's plenty of structure down around $6.

On the other hand there's also plenty of structure up near $17.50 - $18.75 in the form of a "change control zone" that the bulls may be gunning for...

Change control zones are one of the five tools we teach when charting anything.  By definition, they are an area that represents where neither the bulls nor bears are in charge.  Price can slash though the zone with seemingly reckless abandon, price can respect the top or bottom from outside it or within it.  Or, price can trade aimlessly sideways within it.  And in this case we see all of the above are true.

When price breaks away from a change control zone it can often get drawn back to it like a magnet.  

So what's next? 

We don't make predictions...

Nobody knows for sure but using these 5 price action tools traders and investors can develop levels of interest in both directions.

  1. Support/Resistance
  2. Trend
  3. Fibonacci 
  4. Supply/Demand Zones,
  5. Change Control Zones

Take a look at the charts and let us know what you think.  

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