Charter Communications, Inc. (NASDAQ: CHTR)

Charter Communications, Inc., through its subsidiaries, provides cable services in the United States. The company offers various entertainment, information, and communications solutions to residential and commercial customers. Its video service offerings include a package of basic video programming, video on demand, subscription on demand, pay-per-view, high definition television, digital video recorder, Spectrum TV app on mobile devices, Spectrum TV app on immobile devices, and Spectrum guide services.

Take a look at the 1-year chart of Charter (NASDAQ: CHTR) below with my added notations:

1-year chart of Charter (NASDAQ: CHTR)

Over the past 3 months, CHTR has formed an inverse head and shoulders reversal pattern (green). I have noted the head (H) and the shoulders (s) to make the pattern more visible. The stock’s neckline resistance is at the $280 level (red). CHTR will confirm its H&S if it breaks through the neckline.

Keep in mind that simple is usually better. Had the inverse H&S pattern never been pointed out, one would still think CHTR was moving higher simply if it broke through the $280 resistance level.

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The Tale of the Tape: CHTR has formed an inverse head & shoulders pattern. A long trade could be entered on a break through the $280 level.

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