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

The last couple of days in the market have seen some significant drops, yet again. As a result, you should probably be noticing that a lot of stocks in your watch list are breaking below key levels. This is not a bad thing at all, rather just new opportunities presenting themselves! One stock that I’d like to review for those potentially new opportunities is that of Itron Inc.

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:

After breaking below its key level of $50 (brown), ITRI fell into a consolidation zone between the $35 level (green) and the $40 level (red). As with a lot of stocks, ITRI broke its $35 support this week and is continuing lower as expected. Based on the stock’s history of developing key levels at the increments of $5 and $10 ($35, 40, 50, etc.), I would expect the next level of support for ITRI to be at $30.

The Tale of the Tape: ITRI has broken its previous level of support at $35 and is moving lower. Based on the stock’s history, and your stance on the market at that time, a long trade could be entered at $30 with a stop below that level. On any potential rallies, a short position could be entered at $35 with a stop placed 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: Starwood Hotels & Resorts (NYSE: HOT)

After writing an article earlier this week on H, I decided to search throughout H’s industry to see if I could find another stock that might also provide a couple of good trading opportunities.  One such stock I found fit that description in H’s industry would be that of Starwood Hotels & Resorts Worldwide Inc.

Starwood Hotels & Resorts Worldwide, Inc. is a hotel and leisure company. The company conducts its hotel and leisure business both directly and through its subsidiaries. Its brand names include St. Regis (luxury full-service hotels, resorts and residences), The Luxury Collection (luxury full-service hotels and resorts), W (luxury and upscale full service hotels, retreats and residences), Westin (luxury and upscale full-service hotels, resorts and residences), Le Meridien (luxury and upscale full-service hotels, resorts and residences), Sheraton (luxury and upscale full-service hotels, resorts and residences), Four Points (select-service hotels), Aloft (select-service hotels), and Element (extended stay hotels). The company is organized into two business segments: hotels and vacation ownership and residential.

To review Starwood’s stock, please take a look at the 1-year chart of HOT (Starwood Hotels & Resorts Worldwide Inc.) below with my added notations:

HOT has created a couple of short-term price levels over the last month. First, HOT has formed a clear resistance area at $45 (red). In addition, the stock has also been climbing a short-term, up-trending support level (green). These two levels combined have HOT stuck within a common chart pattern known as an Ascending Triangle that will eventually have to break one way or another. If the break is higher, the upper levels of $50 and $55 could come into play as well.

A break above $45 should signal higher prices for HOT, but if the stock were to break the up trending support line instead, HOT will most likely hit new 52-week lows.

 

The Tale of the Tape: HOT is currently stuck between two very important levels for the stock: The up-trending support and the $45 resistance. A long trade could be made on a break above the $45 level or on a pullback to the up-trending support (currently near $40) with a stop placed under the level of entry. On the other side, you could enter a short trade on HOT at the $45 resistance or if the stock breaks below the up-trending support level. In that case, a stop should be placed above 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: Sonoco Products (NYSE: SON)

A lot of the stocks I’ve seen and written articles about lately have been hanging out in similar consolidation areas. As you may have noticed, there have been several Rectangle and Triangle patterns in my newsletters as of late. However, not all stocks are stuck at the bottom. Some have actually been trying to climb out of the cellar. One stock that seems to have been trying to do that is the stock of Sonoco Products.

Sonoco Products Company is a manufacturer of industrial and consumer packaging products and a provider of packaging services. The company operates in four segments: Consumer Packaging, Tubes and Cores/Paper, Packaging Services, and All Other Sonoco. In 2010, Sunoco acquired Associated Packaging Technologies, Inc., a supplier of thermoformed containers to the frozen food industry, and Madem Reels USA, Inc., a manufacturer of nailed wood and plywood reels for the wire and cable industry, a small tube and core business in Canada and a small tube and core business in Greece.

Before discussing the potential trading opportunities with SON (Sunoco Products Company), please review the 1 yr. chart of SON that I have outlined below, with my added notations:

After bottoming out around the $28 support level (short-term Double Bottom), SON has moved out of that range over the last 3-4 weeks. Along the way, $30 has been both a support and resistance. Now, the stock has approached the same $32 level that had been support prior to the August breakdown. These (3) levels also seem to imply that SON is currently moving in steps of $2 ($28, 30, 32).

 

The Tale of the Tape: SON has moved out of its lower range and has now approached a key level of $32. As the stock has bottomed and moved higher, the level $30 has also become important. A long position could be entered on a pullback to the $30 level or on a breakout above $32. However, a bearish trader could short the stock at $32 while then adding to their position on a break below $30.

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: Hyatt Hotels Corporation Class (NYSE: H)

Hyatt Hotels Corporation is a hospitality company which manages, franchises, owns and develops Hyatt-branded hotels, resorts and residential and vacation ownership properties. Hyatt manages its business in three segments: owned and leased hotels, which consists of its owned and leased full service and select service hotels; North American management and franchising, which consists of the company’s management and franchising of properties located in the United States, Canada and the Caribbean, and International management and franchising, which consists of its management and franchising of properties located outside of the United States, Canada and the Caribbean. Its full service hotels and resorts operate under five brands: Park Hyatt, Andaz, Grand Hyatt, Hyatt Regency and Hyatt. Hyatt’s two select service brands are Hyatt Place and Hyatt Summerfield Suites.

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

H has fallen into a sideways, consolidation pattern know as a Rectangle. 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 H, the Rectangle pattern formed a $35 resistance (red) and a $30 support (green). Although H has had two failed breakout attempts already, the stock will have to break 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 H is $5 high ($35 – $30), H should climb to a minimum of $40 ($35 + $5) if it breaks above $35 or fall to $25 ($30 – $5) if the stock breaks below the $30 level. Chart pattern price targets are certainly not guarantees, but they are often fulfilled.

The Tale of the Tape: H 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 H, a trader could enter a long position at the $30 support or a short position on a rise to $35. However, 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 H were to break above $35 or a short position if the stock breaks below $30.

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: Nordson Corporation (NasdaqGS: NDSN)

Nordson Corporation is a manufacturer of equipment used for precision material dispensing, testing and inspection, surface preparation and curing. Its technology-based systems can be found in production facilities globally. It serves diverse markets, including the appliance, automotive, bookbinding, container, converting, electronics, food and beverage, furniture, life sciences and medical, light emitting diodes (LED), metal finishing, nonwoven, packaging, semiconductor and solar energy industries. Its products are marketed through a network of direct operations in more than 30 countries. The company operates in three segments: Adhesive Dispensing Systems, Advanced Technology Systems and Industrial Coating Systems.

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

I latched on to NDSN because of the one simple level at $45. Not only can you see the $45 support (green) from earlier in the year, but the $45 resistance (red) has been very obvious over the last 2 months. So, the $45 price is key to this stock. If you are bearish, you might short NDSN at the $45 mark, but if you are bullish you would want to see the stock break through the $45 resistance.

The Tale of the Tape: NDSN presents a couple of very simple trading opportunities based on its key level of $45. A short position could be entered at the $45 resistance with a stop above that level, or a long play could be made on a break above $45 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