United Continental Holdings Inc (NYSE: UAL)

United Continental Holdings, Inc., together with its subsidiaries, provides air transportation services in North America, the Asia-Pacific, Europe, the Middle East, Africa, and Latin America. It transports people and cargo through its mainline operations, which use jet aircraft with at least 118 seats, and its regional operations. As of December 31, 2014, the company operated a fleet of 1,257 aircraft. It also sells fuel; and provides maintenance, ground handling, and catering services for third parties. The company was formerly known as UAL Corporation and changed its name to United Continental Holdings, Inc. in October 2010. United Continental Holdings, Inc. was founded in 1934 and is headquartered in Chicago, Illinois.

Take a look at the 1-year chart of United (NYSE: UAL) below with added notations:

1-year chart of United (NYSE: UAL)

After selling off from January into June, UAL started trading sideways over the following few months. While in the sideways move, the stock has formed a key pair of price levels that are worth watching. UAL has a resistance at $60 (red) and a $50 support (green). At some point one of those levels will have to break.

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The Tale of the Tape: UAL is trading inside a trading range. The possible long positions on the stock would be either on a pullback to $50 or on a breakout above $60. The ideal short opportunity would be on a break below $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!

Good luck!

Christian Tharp, CMT

Follow me on Twitter: @cmtstockcoach