After being a chart watcher for many, many years now one gets accustomed to seeing things, and has a better idea how to read them and interpret potential movements. There are many including candlesticks, gap fills, base breakouts, double bottoms, etc., but today we will look at the round number theory which happens a lot more than you think. It can be a way to add or cut back to major long term holdings. SHAK has traded between the round 30-40 numbers with the week ending 1/15 precisely bouncing off 30 and this week finding resistance at 40 (bull trap weeks ending 2/26-3/4 quickly reversed back into range). Lets take a look at some recent examples.

As the homebuilders gain strength their are a plethora of names that benefit. Lets take a look at LZB, a best of breed name in the furniture space. The stock has gained ground 4 consecutive times after reporting earnings higher by 6.5, 18, .3 and 2.2% on 6,22, 2/18, 11/18 and 8/19. This year on a weekly basis it has CLOSED below the round 20 number just once, albeit fractionally the week ending 2/5 which finished at 19.97. Would maintain a cautious stance here as the round 30 number where it now resides was resistance dating back to the 3 weekly CLOSES above ending 12/20/13-1/3/14. The trade is a good risk/reward short here, but if a break above those intraweek highs of 31.32 where to happen one could reverse and go long.

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