Intrepid Potash, Inc. (NYSE: IPI)

Intrepid Potash, Inc., together with its subsidiaries, produces and markets muriate of potash and langbeinite in the United States. Its langbeinite is a low-chloride potassium fertilizer with the additional benefits of sulfate and magnesium. The company also offers by-products, such as salt, magnesium chloride, and metal recovery salts. It serves agricultural, industrial, and animal feed markets. The company is headquartered in Denver, Colorado.

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

1-year chart of IPI (Intrepid Potash, Inc.)

IPI has been trading sideways for the last 8 months. Over that period of time the stock has formed a clear resistance level at $17 (red). In addition, the stock has also created a strong level of support at $14 (blue). At some point the stock will have to break one of the two levels that the rectangle pattern has created.

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The Tale of the Tape: IPI has clear levels of support ($14) and resistance ($17). The possible long positions on the stock would be either on a pullback to $14, or on a breakout above $17. The ideal short opportunity would be on a break below $14.

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