Tractor Supply Company operates retail farm and ranch stores in the United States. Its stores provide a selection of merchandise, including equine, livestock, pet, and animal products, such as items for their health, care, growth, and containment; hardware, truck, towing, and tool products; seasonal products comprising lawn and garden items, power equipment, gifts, and toys; maintenance products for agricultural and rural use; and work/recreational clothing and footwear products. As of September 28, 2013, the company operated 1,245 stores in 47 states, as well as a Website under the TractorSupply.com name. It serves recreational farmers and ranchers, as well as tradesmen and small businesses.
To review Tractor’s stock, please take a look at the 1-year chart of TSCO (Tractor Supply Company) below with my added notations:
TSCO has been somewhat of a unique stock among most in that it has done nothing but rally higher all year long. It has consolidated sideways several times along the way with the most recent consolidation having formed an obvious $75 resistance (blue), which was also a 52-week high resistance. Finally, last week TSCO broke through that $75 resistance.
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The Tale of the Tape: TSCO broke out to a new 52-week high and has now pulled back. A long trade could be made at $75 with a stop placed below that level. A break below $75 would negate the forecast for a continued move higher.
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