MKS Instruments, Inc. (NASDAQ: MKSI)

MKS Instruments, Inc. provides instruments, subsystems, and process control solutions that measure, control, power, deliver, monitor, and analyze critical parameters of manufacturing processes worldwide. The company operates through two segments, Vacuum & Analysis and Light & Motion.

Take a look at the 1-year chart of MKS (NASDAQ: MKSI) below with my added notations:

1-year chart of MKS (NASDAQ: MKSI)

MKSI has been trending higher for most of the past year. Recently, the stock created a 52-week high resistance level at $110 (green), while also climbing a trendline of support (blue). At some point, MKSI will have to break either the $110 resistance or the trendline.

The Tale of the Tape: MKSI is sitting under resistance. A long trade could be made on a break above the $110 level, or on a pullback to the trendline, with a stop placed below that level. A trendline break likely means lower prices.

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