Teradyne Inc. (NYSE: TER)

Teradyne, Inc. is a global supplier of automatic test equipment. The company designs, develops, manufactures and sells automatic test systems and solutions used to test complex electronics in the consumer electronics, automotive, computing, telecommunications, wireless, and aerospace and defense industries. Teradyne’s automatic test equipment products and services include semiconductor test systems, military/aerospace test instrumentation and systems, storage test systems, and circuit-board test and inspection systems (collectively these products represent Systems Test Group), and wireless test systems.

To review Teradyne’s stock, please take a look at the 1-year chart of TER (Teradyne, Inc.) below with my added notations:

TER has created a couple of short-term price levels over the last 3 months. First, TER has formed a clear resistance at $17.50 (blue). In addition, the stock has been climbing higher on an up-trending support level (red) during that same period of time. These two levels combined had TER stuck within a common chart pattern known as an Ascending Triangle. Eventually, TER will have to break one of those (2) levels.

The Tale of the Tape: A long trade could be made on TER if the stock breaks out through the $17.50 level, with a stop placed under that level. A pullback to the trend line support could also provide a long trade. However, a break of that support line would be an opportunity to enter a short trade on the stock.

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