FMC Corporation, a diversified chemical company, provides solutions, applications, and products for the agricultural, consumer, and industrial markets worldwide.
Take a look at the 1-year chart of FMC (NYSE: FMC) below with my added notations:
Over the last 9 months, FMC has been trending consistently higher, while also forming a nice trend line of support (green). In addition, the stock also has also created a key level of resistance at $95 (red). At some point, FMC will have to break one of those two levels.
The Tale of the Tape: FMC has a trend line support and a $95 resistance. A long position could be entered on a break above $95, or on a pullback to the trendline, with a stop placed below the level of entry. A short position could be entered if FMC were to break below its trendline.
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