IPG Photonics Corporation (NASDAQ: IPGP)

IPG Photonics Corporation develops and manufactures a range of high-performance fiber lasers, fiber amplifiers, and diode lasers used in various applications primarily in materials processing worldwide.

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

1-year chart of IPG (NASDAQ: IPGP)

Over the past two months, IPGP has run up against a $260 resistance (red) on two separate occasions. In addition, the stock has been climbing a trend line of support (green) since the beginning of February. Together, these two lines have formed an ascending triangle on IPGP. Eventually, the stock will have to break either the $260 resistance or the triangle support.

The Tale of the Tape: IPGP is winding up between two key levels. A long trade could be made at the triangle support or on a break above $260. A break below the trendline would be an opportunity to enter a short trade.

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