New Oriental Education & Technology Group (NYSE: EDU)

New Oriental Education & Technology Group Inc. provides private educational services primarily in China. The company offers language training courses that consist of various types of English language training courses, as well as training courses for other foreign languages, including German, Japanese, French, Korean, and Spanish; and test preparation courses for language and entrance exams used by educational institutions in the United States, the People’s Republic of China, and the Commonwealth countries. It also operates primary and secondary schools in Yangzhou; develops and edits content for educational materials for language training and test preparation, such as books, software, CD-ROMs, magazines, and other periodicals that are distributed through its classrooms and bookstores, and third-party distributors. In addition, the company provides consulting services to help students through the application and admission process for overseas educational institutions; college, graduate, and career counseling advice; and counseling for students with the immigration process for overseas studies, such as obtaining visas, and student and off-campus housing. Further, it offers pre-school education; and software and other technology development and distribution services.

Please take a look at the 1-year chart of EDU (New Oriental Education & Technology, Inc.) below with my added notations:

1-year chart of EDU (New Oriental Education & Technology, Inc.)

The potential trades on EDU are pretty simple. The stock has been holding a very important level of support at $16 (blue) since the beginning of October. No matter what the market has or has not done since then, EDU has not broken below that area of support. However, if the market should move lower, the stock would most likely break that support and move lower from there.

The Tale of the Tape: EDU has held a strong level of support at $16. If the stock were to approach that level again, a trader could enter a long position with a stop placed under the level. If EDU were to break below the support, a short position would be recommended 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