Adient plc manufactures automotive seating systems. The firm’s products include Complete Seats, Commercial vehicle seats, Structures & Mechanisms, Foam, Fabrics and Trim. It operates through the following segments: Seating, Seat Structures and Mechanism, and Interiors segments.
Take a look at the 1-year chart of Adient (NYSE: ADNT) below with added notations:
For most of the past year, ADNT has been trading in a sideways range. During that same time, the stock had repeatedly run up against a $26 resistance mark. Now that ADNT has broken above that level higher prices should continue.
The Tale of the Tape: ADNT broke its 52-week resistance at $26. The possible long position on the stock would be on a pullback down to that level with a stop placed under it. A break back below $26 could negate the forecast for a move higher.
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