PerkinElmer, Inc. provides products, services, and solutions to the diagnostics, research, environmental, industrial, food, and laboratory services markets worldwide. The company operates through two segments, Discovery and Analytical Solutions and Diagnostics.
Take a look at the 1-year chart of Perkin (NYSE: PKI) below with the added notations:
PKI had been trending consistently higher until hitting resistance at $70 (blue) in July, and again in September. Once the stock broke through that level in October, PKI hit new highs, but has pulled back to the $70 level as support twice during that time. Whether higher or lower, the $70 level has proven itself to be key to the stock.
The Tale of the Tape: PKI has a key level at $70. A trader could enter a long position on a pullback down to that level with a stop placed under it. However, if traders are bearish on the stock, a short trade could be made instead on a break back below $70.
Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.
No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!
Christian Tharp, CMT