Ultra Clean Holdings, Inc. designs, develops, prototypes, engineers, manufactures, and tests production tools, modules, and subsystems for the semiconductor capital equipment and equipment industry segments primarily in North America, Asia, and Europe. It offers precision robotic systems that are used when accurate controlled motion is required; gas delivery systems, which include one or more gas lines consisting of small diameter internally polished stainless steel tubing products, filters, mass flow controllers, regulators, pressure transducers and valves, component heaters, and an integrated electronic and/or pneumatic control system; and various industrial and automation production equipment products.
Take a look at the 1-year chart of Ultra (NASDAQ: UCTT) below with the added notations:
UCTT has been trending higher, overall, for the past year. During the most recent few months, the stock has created a key price level at $15 (blue). In addition, a trendline of support (green) has formed from the stock’s January low. UCTT has bounced off of those supports yesterday and looks like it’s moving higher in the short-term.
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The Tale of the Tape: UCTT has a key level of support at $15, and a trendline of support. A trader could enter a long position near the $15 level, with a stop placed under it. However, a break below $15, and the trendline, could be an opportunity to get short the stock.
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