Baker Hughes Incorporated (NYSE: BHI)

Baker Hughes Incorporated is engaged in the oilfield services industry. Baker Hughes is a supplier of oilfield services, products, technology and systems to the worldwide oil and natural gas industry. It also provides industrial and other products and services to the downstream refining, and the process and pipeline industries. The company may conduct its operations through subsidiaries, affiliates, ventures and alliances. It operates in more than 80 countries worldwide. The company operates in five segments. Four of these segments represent its oilfield operations and their geographic organization: North America, Latin America, Europe/Africa/Russia Caspian and Middle East/Asia Pacific. It’s Industrial Services and other segment includes downstream chemicals, process and pipeline services, and the reservoir development services group.

To analyze Baker’s stock for potential trading opportunities, please take a look at the 1-year chart of BHI (Baker Hughes, Inc.) below with my added notations:

Over the last 2-3 months, BHI has formed a strong support at $40 (black).  Starting back in March, BHI has tested that $40 level on 5 or 6 occasions.  In addition, BHI has created an important level at $45 (blue) as well, both as support (December and January) and resistance (April – May). The stock appears to be pulling back to the $40 support level again.

The Tale of the Tape: BHI is currently trading between its $40 and $45 price levels. A long position could be entered on a pullback to $40 or on a break above $45 with a stop placed below the level of entry. However, if you are bearish on the stock or overall market, a short trade could be made on a break below the $40 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