Apergy Corp. provides engineered equipment and technologies that help companies drill for and produce oil and gas. It operates through the following two segments: Production & Automation Technologies and Drilling Technologies.
Take a look at the 1-year chart of Apergy (NYSE: APY) with the added notations:
APY seemed as if it had bottomed out in the fall of 2019 after rallying off of a clear level of support at $24 (green). However, yesterday the stock broke down below that key support, which also sent SPY to a new 52-week low. If the stock rallies, traders could expect $24 to now act as resistance.
The Tale of the Tape: APY has broken a key support level of $24, which was also a 52-week low breakdown. This should signal even lower prices ahead for the stock. A short trade could be entered on APY if the stock rallies back up to $24. A break back above $24 could negate the forecast for a move lower and a long position might be considered 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