C.R. Bard, Inc. (NYSE: BCR)

C. R. Bard, Inc. and its subsidiaries design, manufacture, package, distribute, and sell medical, surgical, diagnostic, and patient care devices worldwide. The company’s vascular products include percutaneous transluminal angioplasty catheters, chronic total occlusions catheters, guidewires, introducers, and accessories; peripheral vascular stents and stent grafts, vena cava filters, and biopsy devices; electrophysiology products comprising electrophysiology laboratory systems and diagnostic, therapeutic, and temporary pacing electrode catheters; and fabrics, meshes, and implantable vascular grafts. Its urology products consists of infection control Foley catheters to reduce the rate of urinary tract infections; surgical slings to treat stress urinary incontinence; brachytherapy services, devices, and radioactive seeds to treat prostate cancer; intermittent urinary drainage catheters, and urine monitoring and collection systems. The company’s oncology products comprise specialty vascular access catheters and ports, vascular access ultrasound devices, dialysis access catheters, and enteral feeding devices to treat and manage various cancers, and other diseases and disorders. Its surgical specialty products include soft tissue repair products, such as hernia repair implants consisting of synthetic and natural-tissue configurations, and hernia implant fixation devices.. The company markets its products to hospitals, individual healthcare professionals, extended care facilities, and alternate site facilities.

Please take a look at the 1-year chart of BCR (C.R. Bard, Inc.) below with my added notations:

1-year chart of BCR (C.R. Bard, Inc.)

BCR rallied very nicely until mid-July. Since May, the stock has created a very important support level at $95 (red). That $95 level is the “neckline” support for BCR’s head and shoulders (H&S) pattern. Above the “neckline” you will notice the H&S pattern itself (purple). Confirmation of the H&S would occur if the stock broke below its $95 “neckline”. If BCR breaks that level, the stock should move lower from there.

Keep in mind that simple is usually better. Had I never pointed out this H&S pattern, one would still think this stock is moving lower simply if it broke below the $95 support level. In short, whether you noticed the pattern or not, the trade would still be the same: On the break below the key $95 level.

The Tale of the Tape: BCR seems to have formed a head & shoulders pattern. Although a trader could go long at $95 expecting a bounce, the stock’s pattern implies an eventual breakdown. If that happens, a short trade should be entered on a break of the $95 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!

Good luck!

Christian Tharp, CMT