Philip Morris International Inc., through its subsidiaries, manufactures and sells cigarettes, other tobacco products, and other nicotine-containing products. Its portfolio of brands comprises Marlboro, Merit, Parliament, Virginia S., L&M, Philip Morris, Bond Street, Chesterfield, Lark, Muratti, Next, and Red & White.
Take a look at the 1-year chart of Philip (NYSE: PM) with the added notations:
After moving higher during the first half of 2016, PM ended up bouncing on top of the $96 support (green) several times over the past 5 months. Now that the stock has fallen back down to that support area again, traders should be able to expect some sort of bounce. However, if the $96 support level breaks, lower prices should follow.
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The Tale of the Tape:: PM has a key area of support at $96. A trader could enter a long position at $96 with a stop placed under the level. If the stock were to break below the support a short position could 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