Advanced Energy Industries, Inc. (NASDAQ: AEIS)

Advanced Energy Industries, Inc., together with its subsidiaries, designs, manufactures, sells, and supports power conversion products that transform power into various usable forms. It offers thin-film deposition power conversion systems, including direct current (DC), pulsed DC mid frequency, and radio frequency (RF) power supplies, as well as matching networks, remote plasma sources for reactive gas applications, and RF instrumentation; and thermal instrumentation products that provide temperature measurement solutions for applications in which time-temperature cycles affect material properties, productivity, and yield. The company also provides solar power inverters, which provide a transformer-based or transformerless grid-tie photovoltaic (PV) solution to convert renewable solar power into electrical power, as well as integrated monitoring and performance measurement of PV installations.

To review Advanced Energy’s stock, please take a look at the 1-year chart of AEIS (Advanced Energy Industries, Inc.) below with my added notations:

1-year chart of AEIS (Advanced Energy Industries, Inc.)

During the last few months, AEIS has been consolidating after its severe drop-off. While consolidating, the stock has formed a clear resistance level at $20, and over the entire year the stock has created a $17, 52-week low support. For now, it appears that AEIS is on its way back down to $17.

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The Tale of the Tape: AEIS seems to be on its way down to $17 after hitting $20 as resistance again. Long trades could be made at $17, or on a break above $20. Short trades could be entered on AEIS if the stock were to break below $17 or rally back up to $20.

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