Today’s Big Stock: Vanguard Health Systems, Inc. (NYSE: VHS)

Vanguard Health Systems, Inc. is an operator of healthcare delivery networks with presence in various urban and suburban markets. As of June 30, 2011, Vanguard had 26 acute care and specialty hospitals, which together with outpatient facilities and related businesses, allow it to provide a range of inpatient and outpatient services in the communities it serves. As of June 30, 2011, its hospitals had a total of 6,201 beds in the five locations: San Antonio, Metropolitan Phoenix, Metropolitan Chicago, Metropolitan Detroit and Masachusetts. On August 1, 2010, Vanguard purchased Westlake Hospital and West Suburban Medical Center in the western suburbs of Chicago, Illinois from Resurrection Health Care.

Please take a look at the 7-month chart of VHS (Vanguard Health Systems, Inc.) below with my added notations:

 

From October through December, VHS found support around $9 (navy). During the same period of time, the stock repeatedly hit $11 as resistance (red). Combined, the stock was stuck within a Rectangle pattern. VHS broke above the $11 resistance in mid-January, and as expected, the stock immediately started to find support at that $11 level. Unfortunately, a bad earnings report sent the stock back below $11 yesterday.

The Tale of the Tape: VHS is back below the $11 level. Long trades could be entered on a pullback down to $9, or on a break back above $11. Short trades could be made on a rally up to $11, or on a break below $9, if that were to happen.

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

 

Today’s Big Stock: KLA-Tencor Corporation (NASDAQ: KLAC)

Most of the price levels highlighted in Today’s Big Stock are of the horizontal variety. They’re easy to identify and easy to trade off of. However, from time to time I also like to discuss important levels that are somewhat of a “moving target” in the form of up or down trendlines. One such stock forming an up trendline is that of KLA-Tencor Corporation.

KLA-Tencor Corporation is engaged in the design, manufacturing and marketing of process control and yield management solutions for the semiconductor and related nanoelectronics industries. KLA-Tencor’s offerings include the Chip Manufacturing, Wafer Manufacturing, Reticle Manufacturing, Complementary Metal-Oxide-Semiconductor Image Sensors Manufacturing, Solar Manufacturing, light emitting diode Manufacturing, Data Storage Media/Head Manufacturing, Microelectromechanical Systems Manufacturing, and General Purpose/Lab Applications. It also provides refurbished KLA-Tencor tools as part of its K-T Certified program for customers manufacturing larger design-rule devices. Its products are used in a number of other industries, including the LED, data storage and photovoltaic industries, as well as general materials research. KLA-Tencor’s products and services are used by the wafer, integrated circuit (IC or chip), reticle and disk manufacturers in the world.

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

KLAC has been in a steady up trend since September and actually came close to breaking out to a new 52-week high earlier this week. Along the way, KLAC has formed a nice trend line of support (blue). Always remember that any (2) points can start a trend line, but it’s the 3rd test and beyond that confirm its importance. As you can see, KLAC’s trend line is VERY important to the stock since it has been tested on (7) different occasions.

The Tale of the Tape: KLAC has created a nice trend line of support over the last (5) months. A long position could be entered on a pullback to the trend line support with a stop placed under the entry. A short position could also be entered if KLAC were to break the trend line of support.

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: Dow Chemical Company Comm (NYSE: DOW)

The Dow Chemical Company is a diversified manufacturer and supplier of products used primarily as raw materials in the manufacture of customer products and services worldwide. It operates in eight segments. Dow provides services to a range of industries, including appliance, automotive, agricultural, building and construction, chemical processing, electronics, furniture, house wares, oil and gas, packaging, paints, coatings and adhesives, personal care pharmaceutical processed foods pulp and paper textile. Its portfolio includes specialty chemical, advanced materials, agro-sciences and plastics businesses deliver a range of technology-based products and solutions to customers in approximately 160 countries.

To analyze Dow’s stock for potential trading opportunities, please take a look at the 1-year chart of DOW (Dow Chemical Company) below with my added notations:

Prior to the August sell-off, DOW had an important support level at $35 (navy). After that August break of support, DOW started forming a strong level of resistance at $30 (green). In the beginning of January the stock broke above that $30 resistance. Now that the stock is trading between the $30 and $35 levels, $30 should act as support on any pullbacks and $35 should now act as resistance if the stock should continue to rally.

 

The Tale of the Tape: DOW is currently trading between its levels of $30 and $35. A long position could be entered on a pullback to $30 or on a break above $35 with a stop placed below the level of entry. A short trade could be made on a break below the $30 or on a test of the $35 resistance.

 

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

Solutia Inc. (NYSE: SOA)

Solutia, Inc. is a global manufacturer of performance materials and specialty chemicals used in a range of consumer and industrial applications, including interlayer and aftermarket film for automotive and architectural glass; chemicals that promote safety and durability in tires, and encapsulates, 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. The Company manages its business in three segments: Advanced Interlayers; Performance Films; and Technical Specialties.

To analyze Solutia’s stock for potential trading opportunities, please take a look at the 1-year chart of SOA (Solutia, Inc.) below with my added notations:

 

SOA’s chart is relatively straightforward because of the one simple price level at $18. Not only can you see the (5) month resistance at $18 (red), but $18 has recently started to become support (green) as expected. So, the $18 price is key to this stock. If you are bullish, you would want to see the stock pull back down to $18. However, if you are bearish, you might short SOA on a break of $18.

The Tale of the Tape: SOA presents a couple of very simple trading opportunities based on its key level of $18. A long position could be entered at the $18 support with a stop below that level, or a short play could be made on a break below the $18, if that should happen.

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: BCE, Inc. Common Stock (NYSE: BCE)

Today I am going to focus on yet another stock that has recently broke to a new 52-week high. As a reminder, when it comes to stocks hitting a 52-week high, I prefer to look for ones hitting a “NEW” high. To me, his would be a stock that hasn’t hit a new 52-week high in quite some time. In addition, and more importantly, I want the stock to have broken through a key area of resistance. This way I know that it wasn’t just any move higher, it was a key breakout.

BCE, Inc. is a Canada’s communications company. BCE provides wireline voice and wireless communications services, Internet access, data services and video services to residential, business and wholesale customers. BCE has three segments: Bell Wireline, Bell Wireless and Bell Aliant. Bell Canada (Bell) is a local exchange carrier in Ontario and Quebec, and is consists of its Bell Wireline and Bell Wireless segments. Bell operates an extensive local access network that provides local telephone services to residential and business customers primarily in the urban areas of Ontario and Quebec. Other sources of local and access revenues include call management services, such as call display, call waiting and voicemail; services provided to competitors accessing its local network, and connections to and from its local telephone service customers for competing long distance service providers.

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

 

BCE had a clear resistance at $40 (navy) from May of last year up until December. That $40 resistance met my definition of a clear resistance level that would signify an important 52-week high breakout if BCE could manage to break above it. As you can see, the stock finally broke through that $40 resistance in mid-December. As expected, that previous $40 resistance seems to have become a new support for the stock.

* Keep in mind that BCE is not a big “mover”. So, traders that enter this stock should do so in expectation of a longer term hold.

 

The Tale of the Tape: BCE formed a key resistance level of $40, which was a 52-week high breakout when BCE broke above it. This should signal higher prices ahead for the stock. A long trade could be made on any pullbacks to the $40 level with a stop placed under that level. A break below $40 would negate the forecast for the stock to move higher.

 

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