DIRECTV (NASDAQ: DTV)

DIRECTV provides digital television entertainment primarily in the United States and Latin America. The company engages in acquiring, promoting, selling, and distributing digital entertainment programming primarily via satellite to residential and commercial subscribers. It offers direct-to-home digital television services, as well as multi-channel video programming distribution services under the DIRECTV and SKY brands. The company provides various channels of digital-quality video entertainment and CD-quality audio programming directly to subscribers’ homes or businesses, including approximately 170 national high-definition television channels and 4 3D channels; and video-on-demand service, which provides movie and television programs to broadband-connected subscribers. It also provides premium professional and collegiate sports programming, such as the NFL SUNDAY TICKET package that allows subscribers to view the NFL games. In addition, the company owns and operates three regional sports television networks based in Seattle, Washington; Denver, Colorado; and Pittsburgh, Pennsylvania under the ROOT SPORTS brand name.

To review DIRECTV’s stock, please take a look at the 1-year chart of DTV (DIRECTV) below with my added notations:

From March until early August, DTV created a key resistance level at $50 (navy). That resistance level was a 52-week high breakout when the stock shot higher in mid-August. That breakout was a sign that the stock should be moving higher, which the stock did do. Now that DTV is pulling back, the old $50 resistance should provide support for the stock.

The Tale of the Tape: DTV broke out to a new 52-week high in mid-August and has now pulled back. A long trade could be made at $50 with a stop placed below that level. If the stock were to break below $50, a short trade should 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