Snap-on Incorporated (NYSE: SNA)

Snap-on Incorporated provides tools, equipment, diagnostics, repair information, and systems solutions for professional users. Its products include hand tools, such as wrenches, screwdrivers, sockets, pliers, ratchets, saws and cutting tools, pruning tools, and torque measuring instruments. The company’s diagnostics and repair information products include handheld and PC-based diagnostics products, service and repair information products, diagnostic software solutions, electronic parts catalogs, business management systems, business services, point-of-sale systems, integrated systems for vehicle service shops, original equipment manufacturer purchasing facilitation services, and warranty management systems and analytics to manage and track performance. Snap-on Incorporated’s equipment products comprise solutions for the diagnosis and service of automotive and industrial equipment, such as wheel alignment equipment, wheel balancers, tire changers, vehicle lifts, test lane systems, collision repair equipment, air conditioning service equipment, brake service equipment, fluid exchange equipment, transmission troubleshooting equipment, safety testing equipment, battery chargers, and hoists..

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

1-year chart of SNA (Snap-on Incorporated)

SNA broke out of its trading range back in July and has been moving higher since. Along the way, SNA has formed a nice trendline of support (blue) and a resistance of $80 (red). One of these two levels will eventually have to break and the stock as already tried to breakout above $80 earlier in January (maroon).

The Tale of the Tape: SNA has created a nice trendline of support over the last (5) months. A long position could be entered on a pullback to that trendline or on another break above $80. A short position could also be entered if SNA were to break the trend line support.

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