Oshkosh Corporation designs, manufactures, and markets specialty vehicles and vehicle bodies worldwide. The company’s Access Equipment segment provides aerial work platforms and tele handlers for use in construction, agricultural, industrial, institutional, and general maintenance applications. The company’s Fire & Emergency segment offers custom and commercial fire apparatus; and emergency vehicles, such as pumpers, aerial platform, ladder and tiller trucks, tankers, rescue vehicles, wild land rough terrain response vehicles, mobile command and control centers, bomb squad vehicles, hazardous materials control vehicles, and other emergency response vehicles. Its Commercial segment offers front-and rear-discharge concrete mixers, portable and stationary concrete batch plants, and refuse collection vehicles to concrete ready-mix and waste services industries.
Take a look at the 1-year chart of Oshkosh (NYSE: OSK) with the added notations:
Over the course of the past 6 months, OSK has tested the $65 level (red) as support on multiple occasions. No matter what the stock had done during that time, OSK had always managed to hold that $65 level. However, yesterday the $65 level broke, and now the stock should be taking another leg down.
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The Tale of the Tape: OSK broke a key level of support at $65. A trader could enter a short position on any rallies up to or near $65 with a stop placed above the level. If the stock were to break back above the $65 level, a long position might be entered instead.
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
Follow me on Twitter: @cmtstockcoach