Moody’s Corporation (NYSE: MCO)

Moody’s Corporation provides credit ratings; and credit, capital markets, and economic related research, data, and analytical tools worldwide. It operates through two segments, Moody’s Investors Service and Moody’s Analytics. The Moody’s Investors Service segment publishes credit ratings on various debt obligations and entities that issue such obligations comprising various corporate and governmental obligations, structured finance securities, and commercial paper programs. The Moody’s Analytics segment develops products and services that support financial analysis and risk management activities of institutional participants in financial markets; and distributes research and data, such as research on debt issuers, industry studies, and commentary on topical credit related events.

Take a look at the 1-year chart of Moody’s (NYSE: MCO) below with the added notations:

1-year chart of Moody's (NYSE: MCO)

MCO has been in an overall, downward move over the past 8 months, and during that time the $95 price level (blue) has become very important to the stock. You will notice on the chart above that $95 was a key support for the last part of 2015, and then that level was resistance here in March. Now that MCO is back above that level, it should act as support again.

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The Tale of the Tape: MCO has a key level at $95. A trader could enter a long position on a pullback to $95 with a stop placed under the level. However, if traders are bearish on the stock, a short trade could be made instead on a break of the $95 support.

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