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

Todays Big Stock: Walter Energy, Inc. Common Stoc (NYSE: WLT)

As a trader, remember to always select stocks that move well. Making money in the market is all about small losses, big winners. You can be wrong an awful lot as long as when you’re right, the winners are big. One stock in particular that moves well enough to give you the great gains when you’re right is that of Walter Energy, Inc.

Walter Energy, Inc. is a producer and exporter of metallurgical coal for the global steel industry and also produces steam coal, coal bed methane gas, metallurgical coke and other related products. Walter Energy operates in three business segments: Underground Mining, Surface Mining and Walter Coke. It operates two underground metallurgical coal mines in Southern Appalachia’s Blue Creek coal seam, the No. 7 Mine and the No. 4 Mine, both operated by Underground Mining, one metallurgical coal mine operated by Surface Mining, Taft’s Reid School Mine, and three steam and industrial coal mines operated by Surface Mining, Tuscaloosa Resources, Inc.’s East Brookwood and Highway 59 Mines and Taft’s Choctaw Mine.

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

 

WLT has a common price level at $70. You can see that each time WLT has bounced on $70 level the stock has went on runs of $15, $15, $10 and now $5. When the stock fell below $70 in September, then rallied back up to hit it as resistance a few days later, you will notice the $15 run down to $55. The point being, when playing WLT of the $70, the stock can go on some very profitable runs.

The Tale of the Tape: WLT is a stock that moves very well, thus providing great risk/reward trading opportunities. A long trade could be entered at $70 with a stop below that level. If the stock were to break back below $70, a short trade could be made with a stop above the 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: Vmware, Inc. (NYSE: VMW)

VMware, Inc. is a provider of virtualization solutions from the desktop to the data center. The Company’s suite of virtualization solutions addresses a range of complex information technology (IT) problems, that include cost and operational inefficiencies, facilitating access to cloud computing capacity, business continuity, software lifecycle management, and corporate computing device management. It works closely with more than 1,700 technology partners, including server, microprocessor, storage, networking and software vendors. Its solutions are based upon its core virtualization technology and are organized into four main product groups: Cloud Infrastructure, Cloud Application Platform, End-User Computing, and Virtualization and Cloud Management.

VMware’s stock is currently trading in the $100 area, so it is obviously a stock on the high end of the price range that I usually like my stocks to be in. However, for the benefit of those traders who like the pricier stocks, I thought I’d analyze it anyway. To review VMware’s stock, please take a look at the 1-year chart of VMW (VMware, Inc. Common Stock) below with my added notations:

I see (3) important price levels on VMW that would interest me: The $100 level (reds), the $95 level (greens), and the $90 level (blues).  The stock has recently bounced on the $95 support and is currently sitting at the $100 resistance. Those are the (2) levels I’d be paying attention to at this time. However, if the stock were to break below the $95 level, the $90 level would come back into play for a trade.

The Tale of the Tape: As seen on the chart, VMW has created price levels at $90, $95 and $100. A long trade could be made on a pullback to $95 or a break above $100. In either case, a stop should be placed under the entry level.  If you are looking for short trades, positions could be entered at $100 or on a break below $95.

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: Polaris Industries Inc. Common (NYSE: PII)

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. Earlier this week, I looked at a stock that had already broken to a new 52-week high, Family Dollar Stores, Inc. Today, I will review another such example: Polaris Industries, Inc.

Polaris Industries Inc. designs, engineers and manufactures off-road vehicles, including all-terrain vehicles and side-by-side vehicles for recreational and utility use, snowmobiles, and on-road vehicles, including motorcycles and low emission vehicles, together with the related replacement parts, garments and accessories. These products are sold through dealers and distributors principally located in the United States, Canada and Europe.

To review Polaris Industries’ stock for potential trading opportunities, please take a look at the 1-year chart of PII (Polaris Industries, Inc.) below with my added notations:

For the last 4 months, PII had a resistance level at $60 (navy). This resistance level was a 52-week high breakout when the stock shot higher last week. This breakout should be a sign that the stock is moving overall higher. However, that certainly doesn’t mean that the stock can’t pull back first, which it has actually already done. The old $60 resistance is currently providing support for PII, as it should. On a very short-term basis, the next area of resistance appears to be taking shape around the $65 level (l. blue).

The Tale of the Tape: PII broke out to a new 52-week high last week and has now pulled back to that level as support. A long trade could be made at $60, or on a break above $65, with a stop placed below the level of entry. A break below $60 would negate the forecast for PII’s 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