Axalta Coating Systems Ltd., through its subsidiaries, manufactures, markets, and distributes high performance coatings primarily for the transportation industry. It operates in two segments, Performance Coatings and Transportation Coatings.
Take a look at the 1-year chart of Axalta (NYSE: AXTA) with the added notations:
AXTA formed a key level of support at $24 (green) back towards the end of last year, and after breaking below that mark, the stock has rallied back above it. If AXTA comes back down to that $24 level again, traders should be able to expect some sort of a bounce. However, if the $24 support were to break, lower prices should follow for the stock.
The Tale of the Tape: AXTA has key support at $24. A trader could enter a long position at or around $24 with a stop placed under the level. If the stock were to break below the support, a short position could be entered instead.
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