Owens-Illinois, Inc., through its subsidiaries, manufactures and sells glass containers to food and beverage manufacturers primarily in Europe, North America, Latin America, and the Asia Pacific.
Take a look at the 1-year chart of Illinois (NYSE: OI) below with my added notations:
OI has trended consistently higher throughout the entire past year. Recently, the stock has created a 52-week high resistance level at $25 (red), while also climbing its trendline of support (green). At some point, OI will have to break either the $25 resistance or the trendline of support.
The Tale of the Tape: OI has a trendline of support and a 52-week high resistance to watch. A long trade could be made on a pullback down to the trendline, or a break of the resistance, with a stop placed below the level of entry. A break below 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