TPI Composites (TPIC) Breaks Ascending Triangle Pattern

TPI Composites, Inc. is a holding company, which engages in the manufacture of composite wind blades for the wind energy market. It operates through the following segments: United States; Asia; Mexico; and Europe, the Middle East, and Africa…

Take a look at the 1-year chart of TPI (NASDAQ: TPIC) below with my added notations:

Over the past several weeks, TPIC had hit the $45 resistance (red) on two separate occasions, while also climbing a trend line of support (green). Together, these two lines had formed an ascending triangle on the stock. Eventually, the stock had to break either the $45 resistance or the triangle support, and yesterday it did.

TPIC broke through its triangle resistance. A long trade could be made one a pullback to the $45 area with a stop place beneath that level. A failure to hold $45 could negate the forecast for higher prices. 

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