Rockwell Automation (NYSE: ROK)

Rockwell Automation Inc. provides industrial automation power, control, and information solutions. The Architecture & Software segment provides control platforms, including controllers, electronic operator interface devices, electronic input/output devices, communication and networking products, and industrial computers that perform multiple control disciplines and monitoring of applications, such as discrete, batch and continuous process, drives control, motion control, and machine safety control. The Control Products & Solutions segment offers low and medium voltage electro-mechanical and electronic motor starters, motor and circuit protection devices, AC/DC variable frequency drives, push buttons, signaling devices, termination and protection devices, relays, and timers.

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

1-year chart of Rockwell (NYSE: ROK)

ROK has been in an overall uptrend since the beginning of the year. However, the stock has recently stalled, as ROK has repeatedly hit the same resistance at $120 (red). The stock is sitting just under that level now. A solid close above the $120 should lead to a significant leg higher for ROK.

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The Tale of the Tape: ROK has a 52-week resistance at $120. The possible long position on the stock would be on a breakout above that level with a stop placed under it.

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