TAL Education Group (NYSE: TAL)

TAL Education Group, through its subsidiaries, provides K-12 after-school tutoring services in the People’s Republic of China. The company offers tutoring services to K-12 students covering academic subjects, including mathematics, physics, chemistry, biology, history, geography, political science, English, and Chinese. It offers tutoring services primarily through small classes, including Xueersi Peiyou, Mobby, and Firstleap tutoring services; personalized premium services; and online course offerings.

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

Over the past year, TAL has been trending consistently higher, while also forming a nice trend line of support (blue). Always remember that any (2) points can start a trend line, but it’s the 3rd test and beyond that confirm its relevance. As you can see, TAL’s trendline appears to be important. If TAL breaks its current $70 support (green) traders should expect a fall to the trendline support.

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The Tale of the Tape: TAL has a $70 support and trendline support to monitor. A long position could be entered on a pullback to the $70 level with a stop placed under it. However, a break of the $70 should lead to a fall down to the trendline support, where another long play could be made.

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

@cmtstockcoach