MSC Industrial Direct Co Inc (NYSE: MSM)

MSC Industrial Direct Co., Inc., together with its subsidiaries, distributes various ranges of metalworking and maintenance, repair, and operations (MRO) products primarily in the United States, Canada, and the United Kingdom.

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

1-year chart of MSC (NYSE: MSM)

MSM had been in a sideways trend from December of last year until June of 2018. During that time, the stock had formed a key level of support at $85 (blue). After breaking that support back in June, MSM has rallied back up to $85 twice to test it as resistance.

The Tale of the Tape: MSM has a key level at $85. Traders could enter a long position on a break back above that level, with a stop placed below it. However, traders that are bearish on the stock might have an opportunity to get short if MSM were to rally back up to $85..

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