Tahoe Resources Inc (NYSE: TAHO)

Tahoe Resources Inc., together with its subsidiaries, explores for and produces precious metals in the Americas. The company primarily produces silver, as well as gold, lead, and zinc. Its principal project is the Escobal project located in Southeast Guatemala. The company was formerly known as CKM Resources Inc. and changed its name to Tahoe Resources Inc. in January 2010. Tahoe Resources Inc. was incorporated in 2009 and is headquartered in Reno, Nevada.

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

1-year chart of Tahoe (NYSE: TAHO)

After declining steadily over the course of the past year, TAHO started trading in a mostly sideways move. While in this sideways move, the stock formed two important price levels to be aware of. The first level to notice is the resistance at $10 (red). The other level TAHO created would be the $7.50 support (green).

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The Tale of the Tape: TAHO is trading between two key price levels. The possible long positions on the stock would be either on a pullback to $7.50 or on a breakout above $10. The ideal short opportunity would be on a break below $7.50.

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