Todays Big Stock: DuPont (NYSE: DD)

E.I. Du Pont de Nemours and Company (DuPont) offers a range of products and services for markets, including agriculture and food, building and construction, electronics and communications, general industrial and transportation. DuPont consists of 13 businesses, which consists of its segments. DuPont operates in seven segments: Agriculture & Nutrition, Electronics & Communications, Performance Chemicals, Performance Coatings, Performance Materials, Safety & Protection, and Pharmaceuticals. The company also includes certain embryonic businesses, such as Applied BioSciences and non-aligned businesses.

Before discussing the potential trading opportunities with DD (E.I. Du Pont de Nemours and Company) please review the 1 yr. chart of DD that I have outlined below, with my added notations:

DD seems to have created (2) very important price levels in which to trade off of. First, the $49 resistance (purple), which was also previous support in June. Second, the $44 level (navy) has been support both before the September drop and after the early October rally. DD is currently trading in between those (2) levels and appears to be on its way down to the $44 level again.

The Tale of the Tape: DD is trading between (2) important price levels at $44 and $49. A rise to the $49 resistance would be a great opportunity to enter a short trade, while a break above that $49 could be a nice long trade. A trader could also enter a long trade on a pull back down to the $44 support, or a short trade on a break below the $44.

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