Zimmer Biomet Holdings, Inc., together with its subsidiaries, designs, manufactures, and markets musculoskeletal healthcare products and solutions in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. It operates through four segments: Americas Spine, Office Based Technologies, Craniomaxillofacial and Thoracic (CMF), and Dental.
Take a look at the 1-year chart of Zimmer (NYSE: ZBH) below with the added notations:
ZBH has made some large moves, both higher and lower, over the course of the past 9 months. Along the way, the stock has commonly found both support and resistance at the $125 level. Now that ZBH is on its way back up to that level again, traders should watch for a break, or a turn down.
The Tale of the Tape: ZBH has a key level at $125. A trader could enter a long position on a break through 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 rally back up to $125.
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