Roper Industries, Inc. designs, manufactures, and distributes radio frequency (RF) products and services, industrial technology products, energy systems and controls, and medical and scientific imaging products and software. Its Medical and Scientific Imaging segment offers patient positioning devices, 3-D measurement technology, diagnostic and therapeutic disposable products, ultrasound bladder volume measurement instruments, and video laryngoscopes. The company’s Energy Systems and Controls segment produces control systems, fluid properties testing equipment, industrial valves and controls, sensors and controls, and non-destructive inspection and measurement products and solutions. Its Industrial Technology segment produces water and fluid handling pumps, equipment and consumables, leak testing equipment, flow measurement and metering equipment, water meter, and automatic meter reading products and systems. The company’s RF Technology segment provides radio frequency identification communication technology and software solutions that are used in toll and traffic systems and processing; security and access control. The company distributes its products through direct sales personnel, manufacturers’ representatives; value added resellers, original equipment manufacturers, and distributors. It principally operates in the United States, Canada, Asia, Europe, the Middle East, and South America.
To review Roper’s stock, please take a look at the 1-year chart of ROP (Roper Industries, Inc.) below with my added notations:
Since moving higher from October of last year, ROP has been consolidating within a small Rectangle pattern over the last (2) months. A Rectangle pattern forms when a stock gets stuck bouncing between a horizontal support and resistance. A minimum of (2) successful tests of the support and (2) successful tests of the resistance will give you the pattern. With ROP, the Rectangle pattern has formed a $103 resistance (red) and a $95 support area (navy), a support that was also a strong resistance prior.
The Tale of the Tape: ROP has formed a common Rectangle pattern. The possible long positions on ROP would be either on a pullback to $95, or on a breakout above $103. The ideal short opportunity would be on a break below $95.
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