Arch Capital Group Ltd. (NASDAQ: ACGL)

Arch Capital Group Ltd., together with its subsidiaries, provides property, casualty, and mortgage insurance and reinsurance products worldwide.

Take a look at the 1-year chart of Arch Capital Group Ltd. (NASDAQ: ACGL) below with my added notations:

1-year chart of Arch (NASDAQ: ACGL)

Since its October peak, ACGL seems to have formed a clear, trend line of resistance (blue). That trendline of resistance is currently sitting just under $82, and a break above that line should mean higher prices, overall, for the stock. The push above the key level at $80 could be a sign of the trendline break coming.

The Tale of the Tape: ACGL has a down trending resistance. A break above that resistance should mean higher prices for the stock, thus a long trade could be made.

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!

Good luck!

Christian Tharp, CMT