Entegris, Inc. manufactures and sells a range of products and services for purifying, protecting, and transporting the critical materials used in processing and manufacturing in the microelectronics and other high-technology industries worldwide. The Critical Materials Handling segment provides a range of products that filter, handle, dispense, and protect critical materials used in the semiconductor manufacturing process and in other high-technology manufacturing. The Electronic Materials segment offers performance materials, materials packaging, and materials delivery systems that enable semiconductor manufacturing. Its products consist of specialized chemistries and performance materials, gas micro contamination control systems and components, and sub-atmospheric pressure gas delivery systems for the safe and efficient handling of hazardous gases to semiconductor process equipment.
Take a look at the 1-year chart of Entegris (NASDAQ: ENTg) with the added notations:
ENTG had been trading in a sideways range for most of 2015. During that entire time, the stock created an important level of support at $13 (green). Now that the stock has broken that support, lower prices should follow. A move back above $13 could negate that expectation.
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The Tale of the Tape: ENTG broke a key level of support at $13. A trader could enter a short position on any rallies up to or near $13 with a stop placed above the level. If the stock were to break back above the $13 level, a long position might be entered 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!
Christian Tharp, CMT
Follow me on Twitter: @cmtstockcoach