Todays Big Stock: EMC Corporation (NYSE: EMC)

As the market has rallied from the beginning October, some stocks have managed to get back up to their respective August breakdown points. Those breakdown points will usually provide strong resistance when approached. A stock that may be hitting that area of strong resistance now would be that of EMC Corporation.

EMC Corporation develops, delivers and supports the information technology industry’s range of information infrastructure and virtual infrastructure technologies, solutions and services. EMC provides information storage, back-up and protection, management, security, information intelligence, data computing and virtualization technologies, services and solutions. EMC operates in two business categories: EMC Information Infrastructure and VMware Virtual Infrastructure. EMC Information Infrastructure provides a foundation for organizations to store, manage, protect, analyze and secure information and enhance their advantage within traditional data centers, virtual data centers and cloud-based IT infrastructures.

Please take a look at the 1-year chart of EMC (EMC Corporation) below with my added notations:

 

As you can see from the chart above, EMC has a very important price level at $25 (purple). After struggling with the $25 resistance in January, EMC broke above that level and continued to bounce on it as support over the next several months. In August, EMC broke that $25 support and fell lower as one would expect. After finding support at $20 (pink) for a few months, the stock has rallied back up to the $25 level only to find resistance again over the last couple of weeks.

The Tale of the Tape: EMC has approached its $25 level again. For those traders waiting for an opportunity to enter a long position, EMC breaking above $25 would provide that trade.  Short traders might want to enter a trade at the $25 with an expectation of a fall back down to the $23 level (teal). Other long trades could be made on a pullback to $23 or down at $20 if that were to happen. A short trade could also be made if the stock broke below $23.

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: TRW Automotive Holdings Corpora (NYSE: TRW)

TRW Automotive Holdings Corp. is a diversified supplier of automotive systems, modules and components to automotive original equipment manufacturers and related aftermarkets. It conducts substantially all of its operations through subsidiaries. These operations encompass the design, manufacture and sale of active and passive safety related products. Active safety related products refer to vehicle dynamic controls, and passive safety related products principally refer to occupant restraints (primarily airbags and seat belts) and safety electronics (electronic control units and crash and occupant weight sensors). TRW operates in four segments: Chassis Systems, Occupant Safety Systems, Electronics and Automotive Components.

Please take a look at the 1-year chart of TRW (TRW Automotive Corp.) below with my added notations:

Notice all of the important price levels I have highlighted on TRW. Over the last 3 months, the stock seems to always find support or resistance on or at the increments of $5. First, notice the $45, topside resistance (red). Next, you can see the common $40 (navy) and $35 (green) levels. In October, the stock bottomed at $30 (pink). The great thing about TRW is that it shows you how to trade it no matter what direction the market moves. If you like the short side of the market, you can short TRW on rallies back up to any $5 level. If you want a long play, you could buy TRW on any pullback to a $5 level or breakout through one of those levels.

The Tale of the Tape: TRW finds the levels of $5 important. These price points always appear to act as either support or resistance or usually both. You can trade this stock no matter what it does. If it rallies back up to $40, you could enter a short play. If it breaks back above $40, you could enter a long play. You could buy TRW if it comes down to $35, or short the stock if it breaks that $35 support. Etc., etc., etc!

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: UTi Worldwide Inc. (NasdaqGS: UTIW)

When selecting stocks to build your watch list, make sure to pick plenty of stocks with multiple trading opportunities. Yesterday’s Big Stock, SOA, has one great trade if it breaks out. However, most of the stocks I watch have upcoming trades regardless of market direction. One stock that fits that description would be that of UTi Worldwide, Inc.

UTi Worldwide Inc. is an international, non-asset-based supply chain services and solutions company that provides services through a network of offices and contract logistics centers. Its primary services include air and ocean freight forwarding, contract logistics, customs brokerage, distribution, inbound logistics, truckload brokerage and other supply chain management services, including consulting, the coordination of purchase orders and customized management services. Uti operates a global network of freight forwarding offices and contract logistics and distribution centers in a total of 62 countries. The company’s business is managed from principal support offices located in Long Beach, California, and several other locations worldwide.

Please take a look at the 1-year chart of UTIW (Uti Worldwide, Inc.) below with my added notations:

UTIW had a very important price level at $18 (purple) that it broke in July. The stock eventually found support at $12 (green) and seems to have a 3-month resistance at $16. After seeing $18, $16, and $12 as price levels, it makes you wonder if $14 has been important as well. As you can see, $14 (blue) has popped up as support and resistance a couple of times over the last 3 months. So, in addition to showing clear levels of support/resistance, UTIW is also showing us that it tends to react to each $2 increment.

The Tale of the Tape: After breaking below its $18 level and falling to $12, UTIW is currently trading between its $14 and $16 levels. A long position could be entered at $14 or on a break above $16 with a stop below the level of entry. If UTIW breaks below $14, another long play could be made at $12. If you are looking for short trades instead, a break below $14 and/or $12 will provide you with those opportunities.

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: Solutia Inc (NYSE: SOA)

Patience is important in the stock market. Waiting for the right entry point, waiting for profits, etc. For example, I wrote and article on DAN earlier in the year in which the appropriate trade would have been on a break above 19. But by being patient, a trade would have never been made because DAN never broke above 19.  On the flip side, had DAN broke above 19, patience would have probably paid off. So, another stock worth watching for a potential break higher would be that of Solutia, Inc.

Solutia Inc. is a global manufacturer of performance materials and specialty chemicals used in a range of consumer and industrial applications, including interlayers and aftermarket film for automotive and architectural glass; chemicals that promote safety and durability in tires, and encapsulants, coatings and specialty chemicals used in a variety of electronic, industrial and energy solutions. To serve the company’s customers, it utilizes a global infrastructure consisting of 22 manufacturing facilities, seven technical centers and over 30 sales offices globally, located in the United States, Europe, Latin America and Asia Pacific. Solutia manages its business in three segments: Advanced Interlayers; Performance Films; and Technical Specialties.

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

SOA has a clear resistance level at $18 (red). If the stock can breakout above that level, the stock should be moving higher overall. However, some traders may have an urge to jump in early in case the stock does break higher. Remember, patience is key, no need to take a loss if you don’t have to.

The Tale of the Tape: SOA has formed a clear resistance level at $18. A long trade should be made if the stock breaks above that $18 level with a stop placed below 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

Todays Big Stock: Itron, Inc. (NasdaqGS: ITRI)

Itron, Inc. is a technology company, offering end-to-end smart metering solutions to electric, natural gas, and water utilities around the world. Itron’s metering solutions, meter data management software, and knowledge application solutions bring additional value to a utility’s metering and grid systems. Its professional services help its customers project-manage, install, implement, operate, and maintain their systems. The company classifies metering systems into three categories: standard metering, advanced metering systems and technology, and smart metering systems and technology.

Before discussing the potential trading opportunities with ITRI (Itron, Inc.), please review the 1 yr. chart of ITRI that I have outlined below, with my added notations:

Like a lot of stocks, ITRI has had a rough go of it over the last year. Over the last 3 months though, the stock has created (2) very important price levels in which to trade off of: First, the $40 resistance (red). Second, the $35 level has been very common. The $35 has been both support (navy) and resistance (blue) since August. ITRI is currently trading in between those (2) levels.

The Tale of the Tape: ITRI is trading between (2) important price levels at $35 and $40. A rise to the $40 resistance would be a great opportunity to enter a short trade, while a break above that $40 could be a nice long trade. A trader could also enter a long trade on a pull back down to the $35 support, or a short trade on a break below the $35.

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