Molson Coors Brewing Co (NYSE: TAP)

Molson Coors Brewing Company manufactures and sells beer and other beverage products. The company sells its products under the Coors Light, Molson Canadian, Belgian Moon, Carling, Carling Black Label, Coors Altitude, Coors Banquet, Creemore Springs, the Granville Island, Keystone, Mad Jack, Molson Canadian 67, Molson Canadian Cider, Molson Dry, Molson Export, Pilsner, and the Rickard’s family brands in Canada; and brews or distributes under the Amstel Light, Heineken, Murphy’s, Newcastle Brown Ale, Strongbow cider, Desperados, Dos Equis, Moretti, Sol, and Tecate brands.

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

1-year chart of Molson (NYSE: TAP)

Over the past three months, TAP has fallen into a sideways trading range. While in the range, the stock has formed a common pattern known as a rectangle. The pattern has formed a resistance at $100 (red), and a $95 support (green). At some point the stock will have to break one of the two levels.

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The Tale of the Tape: TAP is trading within a rectangle pattern. The possible long positions on the stock would be either on a pullback to $95 or on a breakout above $100. The ideal short opportunity would be on a break below $95.

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