Time Warner Cable Inc (NYSE: TWC)

Time Warner Cable, Inc. operates as a cable operator in the United States. It offers video, high-speed data, and voice services over its broadband cable systems to residential and business service customers. The company provides a range of video services, including video on demand and digital video recorder (DVR) services, as well as programming in three-dimensional format; residential high-speed data services with connection to the Internet; wireless mobile broadband services; and digital phone services to residential customers. It also offers residential voice service, digital home phone, and local and long distance calling throughout the United States, Canada, and Puerto Rico. In addition, the company provides video programming tiers and music services; high-speed data, networking, and transport services; and managed and outsourced information technology solutions and cloud services, as well as managed hosting, cloud, application, and messaging services.

To review potential trading opportunities with Time Warner’s stock, please take a look at the 1-year chart of TWC (Time Warner Cable, Inc.) below with my added notations:

1-year chart of TWC (Time Warner Cable, Inc.)

After rallying higher from its June low, TWC formed a double top price pattern (blue). Double tops are reversal patterns and are as simple as they sound: Rallying up to a point (T), selling off to a support, and then rallying back up again to approximately the same top (T). As with any price pattern, a confirmation of the pattern is needed. TWC confirmed its pattern by breaking the $90 support (purple) that was created by the double top pattern.

The Tale of the Tape: TWC has broken down from its double top and should be moving lower overall. A short trade could be made on any rallies back up to $90, while a long trade could be made if the stock were to break back above the $90 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