Northern Trust Corporation, a financial holding company, provides asset servicing, fund administration, asset management, fiduciary, and banking solutions for corporations, institutions, families, and individuals worldwide. It operates through two segments, Corporate & Institutional Services (C&IS) and Wealth Management.
Take a look at the 1-year chart of Northern (NASDAQ: NTRS) below with my added notations:
NTRS has trended consistently higher throughout the past year. Recently, the stock had created a 52-week high resistance level at $90 (green), while also climbing a short-term trendline of support (blue). At some point, NTRS was going to have to break one of those two levels, and the stock broke the 52-week high resistance earlier this week.
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The Tale of the Tape: NTRS broke a key resistance level to new highs. A long trade could be made on a pullback down to the $90 level, with a stop placed below that level. A break below the $90 mark 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