Trimble Navigation Limited (NASDAQ: TRMB)

Trimble Navigation Limited designs and distributes positioning products and applications enabled by global positioning system (GPS), optical, laser, and wireless communications technology. It serves agriculture, architecture, civil engineering, construction, environmental management, government, natural resources, transportation, and utilities industries through dealers, distributors, and authorized representatives worldwide.

Take a look at the 1-year chart of Trimble (Nasdaq: TRMB) below with my added notations:

1-year chart of Trimble (Nasdaq: TRMB)

TRMB has been in a persistent downtrend since April. During that time the stock has also formed an important trend line of resistance (red). Always remember, any (2) points can start a trend line, but it’s the 3rd test and beyond that confirm its importance. So, TRMB obviously has an important trendline of resistance, which currently sits near $28.50.

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The Tale of the Tape: TRMB is currently stuck under a down trending resistance. A break above resistance should mean higher prices, thus a long trade could be made. Short traders might look to enter a trade at the resistance.

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