Louisiana-Pacific Corporation, together with its subsidiaries, manufactures building products primarily for use in new home construction, repair and remodeling, and outdoor structure markets. It also markets and sells products for use in light industrial and commercial construction applications. It operates through four segments: Siding; North America Oriented Strand Board (OSB); Engineered Wood Products; and South America.
Take a look at the 1-year chart of Louisiana (NYSE: LPX) below with my added notations:
Since the beginning of March, LPX has formed an important level of resistance to watch at the $26 (red) mark. The stock is making its way back to the level again, and a solid close above that $26 level should lead to much higher prices for LPX.
The Tale of the Tape: LPX has a key level of resistance at $26. A long trade could be entered on a break through that level. However, if you are bearish on the stock, a short trade could be made on any rallies up to $26.
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