Today’s Big Stock: Stryker Corporation Common Stoc (NYSE: SYK)

Stryker Corporation (Stryker) is a medical technology company. Stryker provides orthopedic implants, as well as medical and surgical equipment. It has two segments: Orthopedic Implants and MedSurg Equipment. Its products include implants used in joint replacement, trauma and spinal surgeries; surgical equipment and surgical navigation systems; endoscopic and communications systems; patient handling and emergency medical equipment, as well as other medical device products used in a variety of medical specialties.

To review Stryker’s stock, please take a look at the 1-year chart of SYK (Stryker Corporation) below with my added notations:

After breaking a key level of $57.50 (navy) in July, SYK fell into a consolidation pattern known as a Rectangle, albeit a rough example of one. This type of pattern forms when a stock gets stuck bouncing between a horizontal support and resistance. A minimum of (2) successful tests of the support and (2) successful tests of the resistance will give you the pattern. The nice thing about a Rectangle pattern is that it will provide you with clearly defined breakout and breakdown points. For SYK, the Rectangle pattern has formed a $50 resistance (red) and a $45 support (blue). The stock will have to break through one of those levels eventually.

Chart patterns can also provide price targets. Simply take the height of the overall pattern and add or subtract that amount to or from the breakout or breakdown point to get the minimum price objective. For example, since the Rectangle pattern for SYK is $5 high ($50 – $45), SYK should climb to a minimum of $55 ($50 + $5) if the stock breaks above $50 or fall to $40 ($45 – $5) if the stock breaks below the $45 level. Chart pattern price targets are certainly not guarantees, but they are often fulfilled.

The Tale of the Tape: SYK has formed a very common chart pattern know as a Rectangle. This pattern shows clear breakout and breakdown points for a potential long or short position. For SYK, a trader could enter a long position at the $45 support or a short position on a rise to $50. However, with Rectangles, a lot of traders like to wait for the break up or down to enter the trade. So, a long trade could be made if SYK were to break above $50 or a short position if the stock breaks below $45.

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

Todays Big Stock: Family Dollar Stores, Inc. Comm (NYSE: FDO)

In several of the articles I have written over the last several months I have discussed potential 52-week high breakout opportunities. With those opportunities, I always like to review stocks that would be breaking key resistance levels in the process of hitting their new high. But for today, I’d like to look at a stock that has already broken to a new 52-week high: Family Dollar Stores, Inc.

Family Dollar Stores, Inc. operates a chain of more than 6,800 general merchandise retail discount stores in 44 states, providing primarily consumers with a selection of priced merchandise in neighborhood stores. Its merchandise assortment includes consumables, home products, apparel and accessories, and seasonal and electronics. The Company offers a focused assortment of merchandise in a number of core categories, such as health and beauty aids, packaged food and refrigerated products, home cleaning supplies, house wares, stationery, seasonal goods, apparel and home fashions. Its stores operate on a self-service basis, and its low overhead enables it to sell merchandise at a moderate markup.

To review Family Dollar Store’s stock, please take a look at the 1-year chart of FDO (Family Dollar Stores, Inc.) below with my added notations:

For most of the year, FDO had a resistance level at $56 (violet). This resistance level was a 52-week high breakout when the stock shot higher in mid-October. This breakout should be a sign that the stock is moving overall higher. However, that certainly doesn’t mean that FDO won’t pull back first, which it actually appears to be doing already. The old $56 resistance should provide support for FDO on a pullback. If not, the up trending support (purple) should be the next level of support.

The Tale of the Tape: FDO broke out to a new 52-week high in mid-October and now appears to be pulling back. A long trade could be made at $56 with a stop placed below that level. If that first level of support doesn’t hold, another long trade might be made on a pullback to the up trending support level, which currently appears to be around the $53 area.

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

Todays Big Stock: Constant Contact, Inc. (NasdaqGS: CTCT)

Constant Contact, Inc. is a provider of on-demand e-mail marketing, social media marketing, event marketing and online survey solutions for small organizations, including small businesses, associations and non-profits. The company’s e-mail marketing product allows customers to create, send and track e-mail marketing campaigns. Its social media marketing features allow customers to manage and optimize their presence across multiple social media networks. The Company’s event marketing product enables customers to promote and manage events, track event registrations and collect online payments. Its online survey product enables customers to create and send surveys and analyze the responses.

Constant Contact Inc. released its quarterly earnings report before the bell today and they do not appeared to be received well. However, that can change once the market opens and it also doesn’t mean that there won’t be potential trading opportunities on the stock regardless.

Before discussing potential trading opportunities, please take a look at the 1-year chart of CTCT (Constant Contact, Inc.) below with my added notations:

There are (3) basic levels to watch on CTCT. The $20 (maroon) level was a key area of resistance when the stock was below it, so it should be an area of support on a pullback. If the stock shoots higher, the level at $22.50 (red) would be worth watching. If CTCT cannot hold $20, traders would probably expect the stock to move lower, possibly back to the $16 (blue) level.

The Tale of the Tape: CTCT released its quarterly earnings report before the bell today and there are several prices to watch. If CTCT looks to hold $20, a long trade could be entered. If the stock drops precipitously, a long trade could then be considered at the $16 level. Before that could happen, the stock would have to have broken the $20 level, thus a short trade could be placed.

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

Todays Big Stock: Pioneer Natural Resources Compa (NYSE: PXD)

Pioneer Natural Resources Company is a holding company. It is an independent oil and gas exploration and production company with existing operations in the United States and South Africa. It explores, develops and produces oil and gas reserves. The Spraberry oil field located in West Texas, the Raton gas field located in southern Colorado, the Hugoton gas field located in southwest Kansas and the West Panhandle gas field located in the Texas Panhandle anchors its asset base. It has exploration and development opportunities and/or oil and gas production activities in the Eagle Ford Shale and Edwards Trend areas of South Texas, the Barnett Shale area of North Texas and Alaska, and internationally in South Africa. Its production operations are located in Texas, Kansas, Colorado and Alaska, and internationally in South Africa.

To review Pioneer’s stock, please take a look at the 1-year chart of PXD (Pioneer Natural Resources Company) below with my added notations:

PXD has been selling off since April. However, over the last month the stock seems to be making an attempt to break out of its downtrend. On it’s way down, and now back up, the stock has usually found important price levels at each increment of $10. The stock bottomed at $60 (blue), found support at $70 (teal) in August & September while hitting the $80 resistance (navy) at the same time. So, if the stock moves higher, might a trader expect $90 (light blue) to be the next resistance?

The Tale of the Tape: PXD seems to be breaking higher. The stock has created price levels at $60, $70 and $80. A long trade could be made on a pullback to $80 with an expectation of a run to $90. In that case, a stop should be placed under the $80 level.  A break of the $80 support would negate the forecast for a move higher and a short trade could be made 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!

Good luck!
Christian Tharp, CMT

Todays Big Stock: Exxon Mobil Corporation Common (NYSE: XOM)

Exxon Mobil Corporation is a manufacturer and marketer of commodity petrochemicals, including olefins, aromatics, polyethylene and polypropylene plastics and a range of specialty products. It also has interests in electric power generation facilities. Exxon Mobil has several divisions and hundreds of affiliates with names that include ExxonMobil, Exxon, Esso or Mobil. Divisions and affiliated companies of ExxonMobil operate or market products in the United States and other countries of the world. Their principal business is energy, involving exploration for, and production of, crude oil and natural gas, manufacture of petroleum products and transportation and sale of crude oil, natural gas and petroleum products.

Before discussing potential trading opportunities for Exxon Mobil, please take a look at the 1-year chart of XOM (Exxon Mobil Corporation) below with my added notations:

XOM has an important, long-term price level at $80 (navy) and another lower, shorter-term level down at $75 (red/green). After breaking below the $80 level in August, XOM fell into a sideways consolidation with $75 being clear resistance. In the beginning of October, the stock broke above the $75 level and has made its way back up to the $80 level.

The Tale of the Tape: Now that XOM is back above $75, that level should act as support on any pullbacks. If that does in fact happen, a long trade at $75 could be made with a stop below that level. A long trade would also be advisable if XOM were to break above $80. If a trader is bearish on XOM and/or the market in general, a short trade could be made here at $80 with a stop above that level

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