Today’s article will focus on a stock that is approaching a 52-week high. As a reminder, when it comes to a stock hitting a 52-week high, I prefer to look for ones hitting a “NEW” high. To me, his would be a stock that hasn’t hit a new 52-week high in quite some time. In addition, and more importantly, I want the stock to have broken through a key area of resistance. This way I know that it wasn’t just any move higher, it was an important breakout.
The Interpublic Group of Companies, Inc., through its subsidiaries, provides advertising and marketing services worldwide. Its services include consumer advertising, digital marketing, communications planning and media buying, public relations, and specialized communications disciplines. The company also provides various diversified services, such as public relations, meeting and event production, sports and entertainment marketing, corporate and brand identity, and strategic marketing consulting. Its global brands include McCann, Draftfcb, Lowe, and Mediabrands; and agency brands comprise Campbell-Ewald, Hill Holliday, The Martin Agency, and Mullen. The company was formerly known as McCann-Erickson Incorporated and changed its name to The Interpublic Group of Companies, Inc. in January 1961.
To review Interpublic’s stock, please take a look at the 1-year chart of IPG (Interpublic Group of Companies, Inc.) below with my added notations:
IPG has been trading mostly sideways since January. During that time, the stock has been running into resistance at $12 (blue). The $12 resistance meets my definition of a clear resistance level that would signify an important 52-week high breakout if IPG could manage to break above it. If the stock does break above the $12, it should be heading higher, most likely on a new uptrend.
The Tale of the Tape: IPG has formed a key resistance level at $12, which would be a 52-week high breakout if the stock can move above it. A long trade should be entered if IPG breaks above $12, with a stop set below that 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!
Christian Tharp, CMT