C.H. Robinson Worldwide, Inc is a third-party logistics company. The Company provides freight transportation services and logistics solutions to companies of all sizes, in a variety of industries. During the year 2010, it handled approximately 9.2 million shipments for more than 36,000 customers. It operates through a network of 231 offices. As a part of its transportation services, it provides a range of value-added logistics services, such as supply chain analysis, freight consolidation, core carrier program management, and information reporting. In addition, it offers two other services: sourcing services and fee-based information services. The sourcing business is the buying, selling, and marketing of fresh produce. Information services consisted of a C.H. Robinson subsidiary, T-Chek Systems, Inc.
To review C.H. Robinson’s stock, please take a look at the 1-year chart of CHRW (C.H.Robinson Worldwide Inc.) below with my added notations:
CHRW has created (2) very important price levels over the last several months. First, the stock has formed a clear support level at $63 (navy). In addition, the stock has also been forming a down trending resistance level (red). These two levels combined have ECA stuck within a common chart pattern known as a Descending Triangle that will eventually have to break one way or another. If the stock should happen to break the $63 support, it would also be a new 52-week low breakdown and that should mean significant lower prices overall.
The Tale of the Tape: CHRW is currently stuck between two very important levels for the stock: The down trending resistance and the $63 support. A long trade could be made on a break above the down trending resistance with a stop placed under the breakout point. You could also enter a short trade on CHRW if the stock breaks below the $63 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!
Christian Tharp, CMT