Autoliv (ALV) Reverses Its Way Back Down

Autoliv, Inc. engages in the development, manufacture, and supply of automotive safety systems. The firm’s products include passive safety systems, including modules and components for passenger and driver airbags, side airbags, curtain airbags, seatbelts and steering wheels. It also supplies anti-whiplash systems and pedestrian protection systems.

Take a look at the 1-year chart of Autoliv (NYSE: ALV) below with added notations…

Chart of ALV provided by TradingView

ALV has formed a major level of support around the $70 level (blue). The stock rallied off that mark once again last week and now appears to have turned back down again. If tested, ALV may rally once more, but if the $70 support were to break instead, lower prices will likely follow for the stock.

The Tale of the Tape: ALV has key support area around $70. A trader could enter a long position at or around the mark with a stop placed under it. If the stock were to break below the support, a short position could be entered instead.

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 


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