Laboratory Corp. of America Holdings (NYSE: LH)

Laboratory Corporation of America Holdings operates as an independent clinical laboratory company worldwide. It operates through two segments, LabCorp Diagnostics and Covance Drug Development.

Take a look at the 1-year chart of Lab Corp (NYSE: LH) below with the added notations:

1-year chart of Lab Corp (NYSE: LH)

During the past 6 months, LH has created two key price levels to watch. Both the $160 (blue) and $165 (green) levels have provided both support and resistance for LH. Now that the stock is declining again, $165 should act as support, and if it breaks, the next support level down should be $160.

The Tale of the Tape: LH has key levels at $160 and $165. A trader could enter a long position on a pullback down to $165 with a stop placed under it. A break below $165 could provide an opportunity to get short instead in expectation of a fall down to $160.

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