Cintas Corporation (NASDAQ: CTAS)

Cintas Corporation provides corporate identity uniforms and related business services for approximately 900,000 businesses in North America, Latin America, Europe, and Asia. The company operates in four segments: The Rental Uniforms and Ancillary Products segment rents and services uniforms and other garments, including flame resistant clothing, mats, mops and shop towels, and other ancillary items; and provides restroom cleaning services and supplies, and carpet and tile cleaning services. The Uniform Direct Sales segment is involved in the direct sale of uniforms and related items, and branded promotional products. The First Aid, Safety, and Fire Protection Services segment offers first aid, safety, and fire protection products and services. The Document Management Services segment provides document destruction, document imaging, and document retention services. The company offers its products and services through its distribution network and local delivery routes, or local representatives to small service and manufacturing companies, as well as corporations.

To review Cintas’ stock for potential trading opportunities, please take a look at the 1-year chart of CTAS (Cintas Corporation) below with my added notations:

1-year chart of CTAS (Cintas Corporation)

CTAS recovered nicely from its October low. Starting in March, the stock began creating a resistance at $40 (navy) that lasted up until the break higher in August. CTAS has consolidated sideways since that breakout and during that time formed another level to watch: A break above the $42 resistance (red) should result in another leg up for the stock.

The Tale of the Tape: CTAS is consolidating between the levels of $40 and $42. A long position could be entered on a pullback to $40 or on a break above $42. If the stock were to break back below $40, a short trade might be considered instead.

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