Parker-Hannifin Corporation manufactures and sells motion and control technologies and systems for various mobile, industrial, and aerospace markets worldwide. The Diversified Industrial segment provides pneumatic, fluidic, and electromechanical components and systems; static and dynamic sealing devices; filters, systems, and diagnostics solutions. The Aerospace Systems segment offers products for use in commercial and military airframe and engine programs.
Take a look at the 1-year chart of Parker (NYSE: PH) below with the added notations:
PH has been trending higher, overall, for the past twelve months. As the stock has been taking its recent pause, it has been finding support at $140 (blue), which was also resistance before PH broke above it in early December. The stock is currently testing that $140 support.
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The Tale of the Tape: PH has a key level at $140. Traders could enter a long position on a pullback to $140, with a stop placed under that level. Traders that are bearish on the stock could enter a short position on a break below that level 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