Hexcel Corp. engages in the development, manufacture, and market of advanced composite materials for the commercial aerospace, space and defense, and industrial markets. It operates through the following segments: Composite Materials; Engineered Products; and Corporate and Other.
Take a look at the 1-year chart of Hexcel (NYSE: HXL) below with the added notations:
Over the past year, HXL has formed an important level to watch at the $72 (blue) mark. That level was resistance last spring, and then it was support from June all the way into February. It now looks as if the stock is headed back towards that same mark.
The Tale of the Tape: HXL has a key level at $72. A trader could enter a long position on a break above 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 up to the $72 mark.
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