Amphenol Corporation (NYSE: APH)

Amphenol Corporation designs, manufactures, and markets electrical, electronic, and fiber optic connectors; interconnect systems; and coaxial and specialty cables worldwide. It’s Interconnect Products and Assemblies segment produces interconnect products and assemblies for voice, video, and data communication systems; information technology; commercial aerospace and military systems; automotive and mass transportation applications; and industrial and factory automation equipment. In addition, it provides radio frequency connector products and antennas used in telecommunications, computer and office equipment, instrumentation equipment, local area networks, and automotive electronics. The company’s Cable Products segment offers coaxial cable and connector products for cable television systems, including full service cable television/telecommunication systems; radio frequency and fiber optic interconnect components for full service cable television/ telecommunication networks; and data cables and specialty cables to connect internal components in systems. The company sells its products directly; and through manufacturers’ representatives and distributors to original equipment manufacturers, original design manufacturers, cable system operators, and telecommunication and electronic manufacturing service companies.

Please take a look at the 1-year chart of APH (Amphenol Corporation) below with my added notations:

There are (2) main price levels to watch on APH. First, the $55 level (navy) has not only been resistance in July, January, February, and over the last 1 ½ months, but it was also a key level of support at the end of February and beginning of March. Next, $50 (green) has also been both a level of support last June-July and a resistance in October. Although the stock has held the $51-52 area over the last month, I believe a sustained sell-off would bring the stock back to the $50 level instead.

The Tale of the Tape: The main level to watch on APH is $55. You would want to buy APH if it breaks above $55, or short the stock on a rally up to $55. The trade you decide to make essentially comes down to what direction you think the overall market might be headed next.

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