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