Quanta Services Inc (NYSE: PWR)

Quanta Services, Inc. provides specialty contracting services and infrastructure solutions in North America and internationally. It operates in three segments: Electric Power Infrastructure Services; Natural Gas and Pipeline Infrastructure Services; and Fiber Optic Licensing and Other. The Electric Power Infrastructure Services segment designs, installs, upgrades, repairs, and maintains electric power transmission and distribution networks, and substation facilities; maintains renewable energy generation facilities; provides emergency restoration services; and network solutions to the electric power industrial customers. The Natural Gas and Pipeline Infrastructure Services segment designs, installs, repairs, and maintains pipeline transmission and distribution systems, gathering systems, and compressor and pump stations, as well as offers related trenching, directional boring, and automatic welding services. The Fiber Optic Licensing and Other segment designs, procures, constructs, maintains, and owns fiber optic telecommunications infrastructure, as well as licenses the right to use these point-to-point fiber optic telecommunications facilities to its customers. This segment offers its services to enterprise, education, carrier, financial services, and healthcare customers, as well as other entities.

To review Quanta’s stock, please take a look at the 1-year chart of PWR (Quanta Services, Inc.) below with my added notations:

1-year chart of PWR (Quanta Services, Inc.)

Over the last (3) months PWR has been consolidating within a common price pattern known as a rectangle. Rectangle patterns form when a stock gets stuck bouncing between a horizontal support and resistance. A minimum of (2) successful tests of the support and (2) successful tests of the resistance will give you the pattern. For PWR, the rectangle pattern has formed a $30 resistance level (red) and a $28 support level (green).

The Tale of the Tape: PWR has formed a rectangle pattern. The possible long positions on the stock would be either on a pullback to $28, or on a breakout above $30. The ideal short opportunity would be on a break below $28.

Would you like assistance in making your TBS trades? If so, email me at Christian@yolopub.com 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!

Good luck!

Christian Tharp, CMT