Covanta Holding Corp. (CVA) hovers under the high

Covanta Holding Corp. (CVA) engages in the operation and ownership of infrastructure for the conversion of waste to energy, related waste transport and disposal, and other renewable energy production businesses.

Take a look at the 1-year chart of CVA below with added notations…

CVA has run up nicely from its low last year, but the stock has recently hit a wall at the $15.50 level (red). That barrier is also preventing the stock from hitting new 52-week highs. A solid close above that $15.50 mark should lead to much higher prices for the stock.

CVA has a 52-week resistance at $15.50. The possible long position on the stock would be on a breakout above that level with a stop placed under it. 

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