United Technologies Corporation provides technology products and services to the building systems and aerospace industries worldwide. Its Otis segment designs, manufactures, sells, and installs a range of passenger and freight elevators, escalators, and moving walkways; modernization products to upgrade elevators and escalators; and maintenance and repair services. The company’s UTC Climate, Controls, & Security segment provides heating, ventilating, air conditioning, and refrigeration solutions, such as controls for residential, commercial, industrial, and transportation applications. Its Pratt & Whitney segment supplies aircraft engines for commercial, military, business jet, and general aviation markets, as well as provides fleet management services for commercial engines; spare parts; and maintenance, repair, and overhaul services. The company’s UTC Aerospace Systems segment supplies aerospace products, including electric power generation, management and distribution systems, flight control systems, engine control systems, intelligence, surveillance and reconnaissance systems, engine components, environmental control systems, etc. Its Sikorsky segment manufactures military and commercial helicopters, as well as provides aftermarket helicopter and aircraft parts and services.
To review United’s stock, please take a look at the 1-year chart of UTX (United Technologies Corporation) below with my added notations:
UTX has essentially been trading sideways since March, while forming a common pattern known as a rectangle. A minimum of (2) successful tests of the support and (2) successful tests of the resistance will give you the pattern. UTX’s rectangle pattern has formed a $120 resistance (red) and a $112.50 support (blue). A break above $120 would also be a new 52-week high.
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The Tale of the Tape: UTX is trading within a rectangle pattern. The possible long positions on the stock would be either on a pullback to $112.50, or on a breakout above $120. The ideal short opportunity would be on a break below $112.50.
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