The Cooper Companies, Inc. (NYSE: COO)

The Cooper Companies, Inc. operates as a medical device company worldwide. The company develops, manufactures, and markets a range of contact lenses, including spherical lenses and toric and multifocal lenses that correct near and farsightedness, as well as address various complex visual defects, such as astigmatism and presbyopia. It also offers medical devices, diagnostic products, and surgical instruments and accessories for healthcare professionals and institutions to support healthcare delivery to women in hospitals, clinician offices, and fertility clinics. The company markets its products through field sales representatives, independent agents, and distributors

Please take a look at the 1-year chart of COO (The Cooper Companies, Inc.) below with my added notations:

1-year chart of COO (The Cooper Companies, Inc.)

Over the last 6 months COO has created a clear level of resistance at $135 (blue). During that same period of time the stock has also created a trendline of support (red) that has been heading lower since August. If the stock’s pattern holds true, COO should be preparing to drop to new lows of the pattern.

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The Tale of the Tape: COO has a key area of resistance at $135. A long trade could be made on a break above $135 with a stop placed below that level of entry. However, short traders might want to look to get into the stock soon in expectation of an eventual fall back down to the trendline support.

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

Follow me on Twitter: @cmtstockcoach