Lincoln National Corporation (NYSE: LNC)

Lincoln National Corporation engages in multiple insurance and retirement businesses in the United States. It operates through four segments: Annuities, Retirement Plan Services, Life Insurance, and Group Protection. The company sells a range of wealth protection, accumulation, and retirement income products and solutions. Its products include fixed and indexed annuities, variable annuities, universal life insurance (UL), variable universal life insurance, linked-benefit UL, term life insurance, indexed universal life insurance, and employer-sponsored retirement plans and services, as well as group life, disability, and dental products.

Take a look at the 1-year chart of Lincoln (NYSE: LNC) below with the added notations:

1-year chart of Lincoln (NYSE: LNC)

LNC has been in an overall, downward move over the past year, and during the majority of that time the $45 price level (blue) has become very important to the stock. You will notice on the chart above that $45 was a key support in mid-2015, and then that level was resistance back in April. A break above that mark should lead to higher prices for LNC.

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The Tale of the Tape: LNC has a key level at $45. A trader could enter a long position on a pullback to $45 with a stop placed under the level. However, if traders are bearish on the stock, a short trade could be made instead on a break of the $45 support.

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

Follow me on Twitter: @cmtstockcoach