TE Connectivity Ltd (NYSE: TEL)

TE Connectivity Ltd., together with its subsidiaries, manufactures and sells connectivity and sensors solutions in Europe, the Middle East, Africa, the Asia-Pacific, and the Americas. The company operates through three segments: Transportation Solutions, Industrial Solutions, and Communications Solutions.

Take a look at the 1-year chart of TE (NYSE: TEL) below with added notations:

1-year chart of TE (NYSE: TEL)

After its 1sy quarter rally, TEL has moved into a sideways trading range. While in the range, the stock has formed a key resistance level at $84 (red), and an $80 support (green).  At some point the stock will have to break one of the two levels.

The Tale of the Tape: TEL is trading within a sideways range. The possible long positions on the stock would be either on a pullback to $80 or on a breakout above $84. The ideal short opportunity would be on a rally back up to $84, or on a break below $80.

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