Medtronic Plc (MDT) Has a Breakout

Medtronic Plc is a medical technology company, which engages in the development, manufacture, distribution, and sale of device-based medical therapies and services. It operates through the following segments: Cardiac and Vascular Group; Minimally Invasive Technologies Group; Restorative Therapies Group; and Diabetes Group…

Take a look at the 1-year chart of Medtronic (MDT) below with added notations:

Once the stock broke through the key $120 resistance mark back in April, MDT soared to $132, which was also the 52-week high. The stock eventually ran back up to the $132 level (red) again, and then it dropped once again. Now that MDT has popped through $132, on route to new 52-week highs, the next leg of the uptrend should be underway.

The possible long position on the stock would be on a pullback down to that level with a stop placed under it. A failure to hold $132 could negate the expectations for a higher move.

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