Thermo Fisher Scientific Inc. (TMO) engages in the provision of analytical instruments, equipment, reagents and consumables, software and services for research, analysis, discovery, and diagnostics. It operates through the following segments: Life Sciences Solutions, Analytical Instruments, Specialty Diagnostics, and Laboratory Products and Services.
Take a look at the 1-year chart of TMO below with the added notations…
Over the past seven months, TMO has formed an important level to watch at the $440 (blue) mark, as that level has provided both support and resistance. TMO looks like it may be on its way back down to that level now, and that could bring another test of the $440 support.
A trader could enter a long position on a decline to that level with a stop placed below it. However, if traders are bearish on the stock, a short trade could be made on a break below the $440 mark.
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