Mattel, Inc. (NASDAQ: MAT)

Mattel, Inc., together with its subsidiaries, designs, manufactures, and markets various toy products. The company operates in three segments: North America, International, and American Girl. Its products comprise fashion dolls and accessories, vehicles and play sets, and games and puzzles. The company also publishes advice and activity books, as well as magazines. It offers its products under the Mattel Girls and Boys brands, including Barbie, Polly Pocket, Little Mommy, Disney Classics, Monster High, Hot Wheels, Matchbox, Tyco R/C, CARS, Radica, Toy Story, Max Steel, WWE Wrestling, Batman, and Superman; Fisher-Price brands comprising Fisher-Price, Little People, BabyGear, Imaginext, Dora the Explorer, Go Diego Go!, Bubble Guppies, Thomas & Friends, Mike The Knight, Octonauts, Mickey Mouse Clubhouse, Disney’s Jake and the Never Land Pirates, See N Say, and Power Wheels; and American Girl Brands, such as My American Girl, Bitty Baby, McKenna, and the newest Girl of the Year.

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

1-year chart of MAT (Mattel, Inc.)

MAT has been trading sideways for the last 3 months. Over that period of time, the stock has formed a clear resistance level at $44 (red). In addition, the stock has also created a strong level of support at $40 (green) that has held since the end of August. At some point the stock will have to break one of those two levels.

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The Tale of the Tape: MAT has identifiable levels of support and resistance. The possible long positions on the stock would be either on a pullback to $40, or on a breakout above $44. The ideal short opportunities would be on a break below $40 or on a rally up to $44.

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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

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