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!
Christian Tharp, CMT