Todays Big Stock: Broadcom Corporation (NasdaqGS: BRCM)

The stock market has had a great week or two and most stocks are moving higher. However, there are a few stocks still maintaining an overall trend lower. In addition, there are some stocks that have actually hit 52-week lows. Stocks that have broken lower in the face of the current market rally, and are at 52-week lows, could be the ones that drop the most when the market eventually does move lower.

When it comes to trading a stock hitting a 52-week low, I prefer to look for ones hitting a “NEW” low. As with stocks hitting new 52-week highs, to me a stock hitting a new low would be a one that hasn’t hit a new 52-week low in quite some time. In addition, and more importantly, I want the stock to have broken through a key area of support. One such stock that fits that description would be that of Broadcom Corporation.

Broadcom Corporation is a provider of semiconductor for wired and wireless communications. Broadcom products enable the delivery of voice, video, data and multimedia to and throughout the home, the office and the mobile environment. The company provides a range of system-on-a-chip and software solutions to manufacturers of computing and networking equipment, digital entertainment and broadband access products, and mobile devices. Its product portfolio includes broadband communications, mobile and wireless, and infrastructure and networking.

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

As you can see, BRCM has been in an overall sideways move since June. Meanwhile, that stock has held a clear support level at $31 (green). Even though the market has caused most stocks to move higher, BRCM has broken below $31, which was breaking to both a new 52-week low and through a clearly defined support level. Last week and into this week, BRCM has rallied back up to the $31 and is currently testing it as new resistance (red).

The Tale of the Tape: BRCM had formed a key support level of $31, which was a 52-week low breakdown when the stock broke below it. This should signal lower prices ahead for the stock. A short trade could be entered on BRCM now or if the stock pulls back up to $31, with a stop set 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

Todays Big Stock:PNM Resources, Inc. (Holding Co (NYSE: PNM)

PNM Resources, Inc. is an investor-owned holding company of energy and energy-related businesses. Its subsidiaries are Public Service Company of New Mexico and subsidiaries, Texas-New Mexico Power Company (TNMP) and subsidiaries and Power, L. P. and subsidiaries (First Choice). PNM is a public utility with regulated operations engaged in the generation, transmission and distribution of electricity and the transmission and distribution and sale of natural gas. TNMP is a regulated utility providing regulated transmission and distribution services in Texas. First Choice is a retail electricity provider operating in Texas. PNMR owns 50% of Optim Energy, which is focused on unregulated electric operations within the areas of Texas covered by Electric Reliability Council of Texas, including the development, operation and ownership of diverse generation assets and wholesale marketing.

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

As you can see from the chart above, PNM can find support and/or resistance at each $1 increment.  Most recently, the stock has bounced at $16, $17 and then $18.
Lastly, there are (3) levels that appear to be more important than others though: $13 (l. blue), $15 (maroon) and $17 (red). The break above $17 in October was also a 52-week high breakout that so far has led to a 10%+ run-up. Could the next $2 increment, $19, be the next “more important” level?

The Tale of the Tape: PNM reacts to each $1 increment, but the odd dollar amounts seem to be more important. A pullback to $18 could be an opportunity to enter a long trade, but since a trader might expect $19 to be tough to get through at first, the better trade might be to wait for a pullback to $17. Either way, a stop should be placed below the level of entry.

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: Benchmark Electronics, Inc. Com (NYSE: BHE)

Benchmark Electronics, Inc. is worldwide provider of integrated electronic manufacturing services. The Company was formed as a wholly owned subsidiary of Intermedics, Inc., a medical implant manufacturer based in Angleton, Texas. It provides its services to original equipment manufacturers of computers and related products for business enterprises, medical devices, industrial control equipment, which includes equipment for the aerospace and defense industry, testing and instrumentation products, and telecommunication equipment. The services that it provides are commonly referred to as electronics manufacturing services. It offers its customers integrated design and manufacturing services from initial product design to volume production, including direct order fulfillment and post deployment services.

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

BHE has created a very important support level at $12 (green) over the last 4 months. In the process, the stock has commonly found resistance at $14 (red). Even though the stock managed to break through that level in October, the stock has since fallen below $14 and is back to resisting it again. BHE is currently trading in between those levels and now appears to be on its way back up to the $14 level.

The Tale of the Tape: BHE is trading between (2) important price levels at $12 and $14. A rise to the $14 resistance would be a great opportunity to enter a short trade, while a break above that $14 could be a nice long trade. A trader could also enter a long trade on a pull back down to the $12 support, or a short trade on a break below the $12.

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: Thermo Fisher Scientific Inc Co (NYSE: TMO)

Thermo Fisher Scientific Inc. is engaged in serving science. It provides analytical instruments, equipment, reagents and consumables, software and services for research, manufacturing, analysis, discovery and diagnostics. It operates through two segments: analytical technologies and laboratory products and services. Analytical technologies segment includes pharmaceutical, biotechnology, academic, government and other research and industrial markets. Laboratory products and services segment offers combination of products and services that allows its customers to engage in their core business functions of research, development, manufacturing, clinical diagnosis and drug discovery.

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

Over the last 4 months, the stock has seemed to find support or resistance on or at the increments of $5. First, notice the $55 topside resistance (navy), which was also previous support. Next, you can see the common $50 level (purple) and the bottom level of $45 (pink). The great thing about TMO 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 could either short TMO on rallies up to a $5 level or on any breakdowns of them. If you want a long play instead, you could buy TMO on a pullback to a $5 level or on any breakout through one of those levels.

The Tale of the Tape: TMO finds the levels of $5 important. These price points always appear to act as either support or resistance and sometimes both. If TMO rallies back up to $50, you could enter a short play. If it breaks back above $50, you could enter a long play. You could also buy TMO if it comes down to $45, or short the stock if it breaks that $45 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: Anadarko Petroleum Corporation (NYSE: APC)

When it comes to entering a stock 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. One such stock that fits that description would be that of Anadarko Petroleum Corporation.

Anadarko Petroleum Corporation is an independent oil and natural gas exploration and production company. Anadarko’s portfolio of assets includes positions in onshore resource plays in the Rocky Mountains region, the southern United States and the Appalachian basin. Anadarko operates in three operating segments: oil and gas exploration and production, midstream, and marketing. Oil and gas exploration and production segment explores for and produces natural gas, crude oil, condensate and natural gas liquids. Midstream segment provides gathering, processing, treating and transportation services to Anadarko and third-party oil and gas producers. It owns and operates natural gas gathering, processing, treating and transportation systems in the United States. Marketing segment sells much of Anadarko’s production, as well as hydrocarbons purchased from third parties.

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

APC has been trading mostly sideways for the majority of the year, while running into resistance at $85 (red). That $85 resistance meets my definition of a clear resistance level that would signify an important 52-week high breakout if APC could manage to break above it.  IF that were to happen, the stock would probably be heading higher, most likely on a new uptrend.

The Tale of the Tape: APC has formed a key resistance level at $85, which would be a 52-week high breakout if APC could break above it. A long trade could be entered if APC breaks above $85, with a stop set below that level. If you are bearish on the overall market and/oil in general, you could also short APC at $85 if the stock happens to get there.

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