Kennametal, Inc. manufactures and supplies tooling, engineered components, and advanced materials consumed in production processes worldwide. It offers standard and customized technologies for metalworking, such as metal cutting tools, tooling systems, and services, as well as materials, such as cemented tungsten carbide products, super alloys, coatings, and investment castings. The company operates in two segments, Industrial and Infrastructure. The Industrial segment serves customers primarily in the aerospace, defense, transportation, and general engineering market sectors, as well as the machine tool industry; and offers its products and services for use in the manufacture of engines, airframes, automobiles, trucks, ships, and various types of industrial equipment. The Infrastructure segment serves customers in energy and earthworks sectors who support primary industries, such as oil and gas, power generation, food and beverage, chemicals, underground mining, surface and hard-rock mining, highway construction, and road maintenance.
Please take a look at the 1 yr. chart of KMT (Kennametal, Inc.) that I have shown below with my added notations:
KMT has formed a nice up-trending channel over the last (9) months. A channel is simply formed through the combination of a trend line support that runs parallel to a trend line resistance. When it comes to a channel, I always tell my students that any (3) points can start the channel, but it’s the 4th test and beyond that confirm it. You can see that KMT has multiple test points between the channel resistance (red) and channel support (blue). Following the KMT channel can provide you with both long and short trading opportunities.
The Tale of the Tape: KMT has formed a common chart pattern know as a channel, in this case, an up-channel. A long opportunity could be entered on a pullback to the channel support, which at this point seems to be around $38. Short trades could be entered at channel resistance OR if KMT were to break below the channel support.
Would you like assistance in making your TBS trades? If so, email me at firstname.lastname@example.org and let’s talk about working together one on one!
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!
Christian Tharp, CMT