Today’s Big Stock: Franklin Resources, Inc. (NYSE: BEN)

Franklin Resources, Inc. is a holding company. Franklin Resources, together with its various subsidiaries, is referred to as Franklin Templeton Investments, is a global investment management organization offering investment choices under the Franklin, Templeton, Mutual Series, Bissett, Fiduciary and Darby brand names. The company operates in two segments: investment management and related services, and banking/finance. Its investment management and related services provides services to investment funds in jurisdictions globally, which include the United States- and non-the United States-registered open-end and closed-end funds, unregistered funds, and institutional, high net-worth and separately managed accounts. The company’s investment management and related services include fund administration, shareholder services, transfer agency, underwriting, distribution, and custodial and other fiduciary services.

Please take a look at the 1-year chart of BEN (Franklin Resources, Inc.) below with my added notations:

 

 

As you can see from the chart above, BEN has an important price level at $120. From April through June, $120 was a key level of support (green). After breaking lower in August, $120 immediately reversed roles, as expected, and became resistance (red). Since bottoming in October, BEN has worked its way back up to the $120 level, which is where the stock currently sits.

The Tale of the Tape: BEN has an important resistance at $120. A short trade could be made on a rally up to $120, with a stop loss placed above that level. If the stock were to break above $120, a long trade should be entered instead, 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