Teekay Corporation provides crude oil and gas marine transportation; offshore oil production; and storage and offloading services in Bermuda and internationally. It operates shuttle tankers, floating storage and offloading (FSO) units, HiLoad dynamic positioning units, and long-distance towing and offshore installation vessels, as well as offers offshore accommodation, storage, and support for maintenance and modification projects.
Take a look at the 1-year chart of Teekay (NYSE: TK) below with my added notations:
After hitting the $10 mark in March, and again in April, TK continued lower down to $5 in June. The stock has rallied since, but stalled once again at the same $10 it hit back in the spring. Now that TK appears to have broken above and held that level, $10 should provide support for higher prices.
The Tale of the Tape: TK broke through its key level of resistance at $10. A long trade could be entered on a pull back down to that level. However, a break back below $10 could negate the forecast for a higher move and would 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