Kellogg breaking down with more to go

Kellogg daily Kellogg was a stock I highlighted back in December, the 16th to be precise, as one for the bears, trading at the time at $61.45 per share. Since then we have seen the stock move lower and in yesterday’s trading session sank through the psychological $60 per share level to end the day at $59.37. You can read the analysis here:

Snap, crackle…………then pop for Kellogg

There are several ways to benefit from a falling stock, one of which is to short through your broker where the stock is borrowed from another investor and lent to you for the duration of the trade. Remember, however, if you are holding this stock and the company declares a dividend you will be responsible for its payment. In addition, there can be extra costs from your broker. The alternative is with options by buying puts which increase in value as the stock falls.  The advantage of buying options is your risk is known and fixed from the outset.

There is plenty more to come from this stock, and with the strong ceiling of resistance now in place at $61.25 and denoted with the blue dashed line, coupled with low volume on the VPOC histogram, the stock is likely to go lower and the downside levels to watch are $59 which is immediately ahead and longer term $52 which is last May’s low.

By Anna Coulling

Charts from NinjaTrader and indicators from Quantum Trading

About Anna 2015 Articles
Hi – my name is Anna Coulling and I am a full time currency, commodities and equities trader. I have been involved in both trading and investing for over fifteen years and have traded many different financial instruments, from options and futures to stocks and commodities. I write and publish articles ( mostly for free ) for UK and international publications on a wide variety of financial issues, and in particular I enjoy helping others learn how to invest and trade.

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