Charles River Laboratories International, Inc., together with its subsidiaries, provides research models and associated services, and outsourced preclinical services to accelerate the drug discovery and development process. It operates in two segments, Research Models and Services (RMS), and Preclinical Services (PCS). The RMS segment is involved in the production and sale of research model strains, principally genetically and microbiologically defined purpose-bred rats and mice for use by researchers. The PCS segment provides preclinical services, including both in vivo and in vitro studies, supportive laboratory services, and strategic preclinical consulting and program management to support product development.
To review Charles’ stock, please take a look at the 1-year chart of CRL (Charles River Laboratories International, Inc.) below with my added notations:
Since December of last year CRL has grinded its way higher. Over the last 7 months though, the stock has formed a key level of $46 (blue) and an area of resistance at $48 (red). That resistance is also a 52-week high resistance. After a brief, fake, breakdown last month, the stock appears to be headed back up towards its $48 resistance.
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The Tale of the Tape: CRL has a $46 level of support and a $48 resistance to watch. A long trade could be made on either a pullback down to $46, or on a break above $48. A break below $46 would be a great time to consider a short trade.
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
Follow me on Twitter: @cmtstockcoach