Allegion PLC (NYSE: ALLE)

Allegion Plc provides security products and solutions that keep people safe, secure and productive. It operates through the following three geographic segments: Americas; Middle East, India, and Africa (EMEIA); and Asia Pacific.

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

1-year chart of Allegion (NYSE: ALLE)

ALLE has formed an up-trending resistance line and an up-trending support level (green). These two lines are converging on one another to form a rising wedge, which is a viewed as a bearish pattern. Confirmation of the pattern would occur if the ALLE broke the up-trending support, which currently sits around $96.

The Tale of the Tape: ALLE has created a rising wedge pattern. A short trade could be entered on a break of the wedge support, which currently sits just under $96. If a trader is instead bullish on the stock, a long play could be made at that support with a stop placed below that level.

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