The Brink’s Company (NYSE: BCO)

Even though it can often be challenging to know what trades to make and when to make them, there are those trading opportunities that are clear and obvious. Usually, the “keep it simple stupid” trades tend to be the better ones anyway. Although that doesn’t mean the trade will work out in your favor, at least you knew it was the right trade at that time. A stock with a trading opportunity that fits that description would be BCO (The Brink’s Company).

The Brink’s Company is a provider of secure logistics and security solutions, including the transportation of valuables, cash logistics and other security-related services to banks and financial institutions, retailers, government agencies, mints, jewelers and other commercial operations worldwide. Other services provided are armored transportation, ATM replenishment and servicing; network infrastructure services; secure global transportation of valuables; currency deposit processing and cash management services. Cash management services include cash logistics services; deploying and servicing safes and safe control devices; coin sorting and wrapping, integrated check and cash processing services; providing bill payment acceptance and processing services to utility companies and other billers, and guarding services, including airport security or Aviation Security.

Please review the 1 yr chart of BCO (The Brink’s Company) below with my added notations:

BCO has been trading mostly sideways for the last 8 months. During that time the stock has been holding a very important level of support at $22 (navy). No matter what the market has or has not done over the last 8 months, BCO has not broken below $22. However, the stock’s series of lower highs (blue) over the last 6 months is a concern considering the overall stock market has moved higher during that time.

The Tale of the Tape: BCO has a very important support at $22. A long trade could be made on a pullback to $22 with a stop placed under that level. However, the stock appears to be preparing to break lower, and if it does, a short trade should be made with a stop placed above $22.

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

City National Corp. (NYSE: CYN)

City National Corporation is a bank holding company and a financial holding company. City National provides a range of banking, investing and trust services to its clients through its wholly owned banking subsidiary, City National Bank. The Bank is a national banking association and operating through 79 offices, including 16 full-service regional centers, in Southern California, the San Francisco Bay area, Nevada and New York City. As of December 31, 2011, it had five consolidated asset management affiliates, in which it held a majority ownership interest. It also had one unconsolidated subsidiaries, Business Bancorp Capital Trust I, as of December 31, 2011. City National Corporation has three segments: Commercial and Private Banking, Wealth Management, and Other.

To analyze City National’s stock for potential trading opportunities, please take a look at the 1-year chart of CYN (City National Corporation) below with my added notations:

The first level to notice on CYN is the $50 level (black), which was resistance in January, and is now acting as support. Next, you can see the current $55 resistance (green) that CYN formed last month. Below the $50 level is the common level of $45 (red) that was not only resistance from August through December, but it also became support in March.

The nice thing about CYN is that it shows you how to trade it no matter what direction the market moves. If you like the short side of the market, you could either short CYN on rallies up to a $5 level or on any breakdowns of them. If you want a long play instead, you could buy CYN on a pullback to a $5 level or on any breakout through one of those levels.

The Tale of the Tape: If CYN breaks above $55, or pulls back to $50, you would want to enter a long play. However, if the stock were to break below $50, a short trade should be made and the $45 level would come back into play for a potential trade as well.  Regardless of which level you enter at or what side of the trade you are on, always remember to set a protective stop.

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

Endo Pharmaceuticals (NasdaqGS:ENDP)

Endo Pharmaceuticals Holdings Inc. is a specialty healthcare solutions company focused on branded and generic pharmaceuticals, devices and services. The company operates in four segments: Branded Pharmaceuticals, Generics, Devices and Services in therapeutic areas, including pain and urology. It has a portfolio of branded pharmaceuticals that includes names such, as Lidoderm, Opana ER, Voltaren Gel, Percocet, Frova, Supprelin LA, Vantas, Valstar and Fortesta Gel. Branded products comprised approximately 61% of its total revenues during the year 2011. Endo’s non-branded generic portfolio accounted for 21% of total revenues in 2011. Device revenue accounted for 11% of total revenues in 2011, and Endo’s services segment accounted for the remaining 2011 revenue.

To review Endo’s stock, please take a look at the 1-year chart of ENDP (Endo Pharmaceuticals Holdings, Inc.) below with my added notations:

After bottoming at $26 in October of last year, ENDP has been in a steady up trend ever since. While moving higher, the stock has formed a nice trend line of support (navy) during the most recent (4) months. Always remember that any (2) points can start a trend line, but it’s the 3rd test and beyond that confirm its importance. Last week the stock broke its level of support and should moving lower overall form here.

The Tale of the Tape: ENDP had created an up trendline of support over the last (4) months. Now that the support has broken, a short position could be entered now or on a rally up to the previous up trendline.

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

Today’s Big Stock: Tenneco Inc. (NYSE: TEN)

Tenneco Inc. is a producer of emission control and ride control products and systems for light, commercial and specialty vehicle applications. The company serves both original equipment vehicle manufacturers (OEMs) and the repair and replacement markets, or aftermarket, worldwide. Tenneco designs, manufactures and sells emission control and ride control systems and products for light, commercial and specialty vehicle applications. It serves the OEMs and replacement markets worldwide through brands, including Monroe, Rancho, Clevite Elastomers, Marzocchi, Axios, Kinetic, and Fric-Rot ride control products and Walker, Fonos, DynoMax, Thrush, and Lukey emission control products. As a parts supplier, the company produces individual component parts for vehicles, as well as groups of components that are combined as modules or systems within vehicles.

To analyze Tenneco’s stock for potential trading opportunities, please take a look at the 1-year chart of TEN (Tenneco, Inc.) below with my added notations:

The first level to notice is the $35 level (navy) that was a key resistance in August and October. Now that TEN is above that resistance, the same $35 is acting as support. Next, you can see the current $40 resistance (red) that TEN has formed over the last (2) months. Below the $35 level is the common $30 level (green).

The nice thing about TEN is that it shows you how to trade it no matter what direction the market moves. If you like the short side of the market, you could either short TEN on rallies up to a $5 level or on any breakdowns of them. If you want a long play instead, you could buy TEN on a pullback to a $5 level or on any breakout through one of those levels.

The Tale of the Tape: If TEN rallies back up to 40, you could enter a short play. If it breaks above $40, you would certainly want to enter a long play. You could also buy TEN if it comes back down to the $35 level, or short the stock if it breaks that $35 support. If the stock were to break below $35, the $30 level would come back into play for a trade as well.

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

Today’s Big Stock: Macy’s Inc. (NYSE: M)

Most of the price levels highlighted in Today’s Big Stock are of the horizontal variety. They’re easy to identify and easy to trade off of. However, from time to time I also like to discuss important levels that are somewhat of a “moving target” in the form of up or down trendlines. One stock forming an up trendline is that of Macy’s, Inc.

Macy’s, Inc. is a retail organization operating retail stores and Internet Websites under two brands, Macy’s and Bloomingdale’s, that sell a range of merchandise, including men’s, women’s and children’s apparel and accessories, cosmetics, home furnishings and other consumer goods in 45 states, the District of Columbia, Guam and Puerto Rico. As of January 29, 2011, the company’s operations were conducted through Macy’s, macys.com, Bloomingdale’s, bloomingdales.com and Bloomingdale’s Outlet. In 2011, the company sold its interest in The Knot, Inc. During the year fiscal ended January 29, 2011, the company opened four Bloomingdale’s Outlet stores.

To review Macy’s stock, please take a look at the 1-year chart of M (Macy’s, Inc.) below with my added notations:

After bottoming at $23 in August of last year, M has been in a steady up trend ever since. Along the way, the stock has formed a nice trend line of support (navy). Always remember that any (2) points can start a trend line, but it’s the 3rd test and beyond that confirm its importance. Obviously M’s trend line is very important to the stock since it has been tested on multiple occasions.

The Tale of the Tape: M has created a nice trend line of support over the last (6) months. A long position could be entered on a pullback to the trend line support, which is currently sitting around $39, with a stop placed under the entry. A short position could also be entered if M were to break the trend line of support.

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