Newell Rubbermaid Inc. (NYSE: NWL)

Newell Rubbermaid Inc. designs, manufactures, and markets consumer and commercial products. It operates in three segments: Home & Family, Office Products, and Tools, Hardware & Commercial Products. The Home & Family segment offers indoor/outdoor organization, food storage, and home storage products; infant and juvenile products, such as car seats, strollers, highchairs, and playards; drapery hardware, window treatments, and cabinet hardware; gourmet cookware, bakeware, cutlery, and small kitchen electrics; and hair care accessories and grooming products to mass merchants, specialty stores, and grocery/drug and department stores. The Office Products segment provides writing instruments, including pens, pencils, markers and highlighters, and art products. The Tools, Hardware & Commercial Products segment offers industrial band saw blades and cutting tools for pipes and HVAC systems; hand tools and power tool accessories; manual paint applicators, window hardware, and convenience hardware.

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

After rallying higher from October until February, NWL has been chopping up an down within a long Rectangle over the last (5) 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. For NWL, the Rectangle pattern has formed a $19 resistance (red) and a $17 support area (navy).

The Tale of the Tape: NWL has formed a common Rectangle pattern. The possible long positions on NWL would be either on a pullback to $17, or on a breakout above $19. The ideal short opportunity would be on a break below $17.

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