Ferro Corporation (NYSE: FOE)

Ferro Corporation produces and sells specialty materials and chemicals in the United States and internationally. The company operates in five segments: Pigments, Powders, and Oxides; Performance Colors and Glass; Performance Coatings; Polymer Additives; and Specialty Plastics. It offers various performance materials, including frits, porcelain and other glass enamels, glazes, stains, decorating colors, pigments, inks, polishing materials, specialty dielectrics, electronic glasses, and other specialty coatings; and performance chemicals comprising polymer additives, engineered plastic compounds, and pigment dispersions. The company’s products are used in appliances, automobiles, building and renovation, electronics, household furnishings, packaging, and industrial products. It sells its products primarily to the manufacturers of ceramic tiles, appliances, construction materials, automobile parts, glass, bottles, and wall coverings directly, as well as through agents and distributors.

Please take a look at the 1-year chart of FOE (Ferro Corporation) below with my added notations:

1-year chart of FOE (Ferro Corporation)

FOE has held a very important level of support at $12 (green) since October of last year. No matter what the market has done lately, FOE has not broken $12. Now the stock is approaching $12 again and that might provide another bounce higher. However, the stock’s recent creation of lower highs could lead to an impending breakdown on the horizon.

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The Tale of the Tape: FOE has a key level of support at $12. A trader could enter a long position at $12 with a stop placed under the level. A break though the trendline resistance, which currently sits near $13, would also be an opportunity to get long on the stock. If the stock were to break below the support, a short position would be recommended instead.

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