Frontier Communications Corporation, a communications company, provides regulated and unregulated voice, data, and video services to residential, business, and wholesale customers in the United States. The company offers residential services, such as fiber-to-the-home and fiber-to-the-node broadband, video, and voice over Internet protocol products, as well as traditional copper-based broadband products; and commercial services, including Ethernet, dedicated Internet, multiprotocol label switching, time division multiplexing, data transport services, and optical transport services.
Take a look at the 1-year chart of Frontier (NASDAQ: FTR) below with my added notations:
FTR went through a major decline from February into July. However, over the past 3 months the stock has created a key price level to watch at $5.50 (red). As you can see, FTR has tested that level multiple times since mid-August. A break above that $5.50 level should mean higher prices for the stock.
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The Tale of the Tape: FTR has a key level of resistance at $5.50. A long trade could be entered on a break through that level. However, if you are bearish on the stock, a short trade could be made on any rallies up to $5.50.
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!
Christian Tharp, CMT
Follow me on Twitter: @cmtstockcoach