Today’s Big Stock: Becton, Dickinson and Company (NYSE: BDX)

Whether the market goes up, or the market goes down, I like to trade stocks that provide me with clear trading opportunities either way. This could be in the form of a pattern, visibly important levels, or maybe a little bit of both. My belief is that knowing where to get in is half the battle. If you can find stocks that clearly show you their most important price points, then you will most likely be setting yourself up for success.

Becton, Dickinson and Company is a global medical technology company engaged in the development, manufacture and sale of medical devices, instrument systems and reagents used by healthcare institutions, life science researchers, clinical laboratories, the pharmaceutical industry and the general public. BD’s operations consist of three business segments: BD Medical, BD Diagnostics and BD Biosciences. On November 19, 2009, BD acquired 100% of the outstanding shares of HandyLab, Inc., a company that develops and manufactures molecular diagnostic assays and automation platforms. In 2010 (fiscal 2010), the company sold the Ophthalmic Systems unit, as well as the surgical blades, critical care and extended dwell catheter product platforms of the Medical Surgical Systems unit.

Please take a look at the 1-year chart of BDX (Becton, Dickinson and Company) below with my added notations:

Notice the important price levels I have highlighted on BDX. The stock seems to always find support or resistance on or at the increments of $5. First, for the last (7) months, BDX has formed a clear $80 resistance (black).  Next, you can see how $75 has acted as both support (green) and resistance (red) over the last (8) months. Lastly, from October through December the $70 level acted as a lower level of support (blue).

The great thing about BDX 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 can short BDX on rallies back up to any $5 level. If you want a long play, you could buy BDX on any pullback to a $5 level or breakout through one of those levels.

The Tale of the Tape: BDX finds the levels of $5 important. If the stock rallies back up to $80, you could enter a short play. If it breaks back above $80, you could enter a long play. You could buy BDX if it comes down to $75, or short the stock if it breaks that $75 support. Etc., etc., etc!

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: FLIR Systems, Inc. (NasdaqGS: FLIR)

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 FLIR (Flir Systems, Inc.).

FLIR Systems, Inc. is a designer, manufacturer, and marketer of thermal imaging systems. The company’s advanced sensors and integrated sensor systems enable the gathering and analysis of information through a variety of applications in commercial, industrial, and government markets worldwide. Its business is organized into two divisions: Commercial Systems and Government Systems. Commercial Systems division includes Thermal Vision & Measurement and Raymarine. Government Systems division include Surveillance, Detection, and Integrated Systems.

Please review the 1 yr chart of FLIR (Flir Systems, Inc.) below with my added notations:

FLIR has been trading sideways for the last 7-8 months. During that time the stock has been holding a very important level of support at $24 (navy), which was also briefly a resistance (red) in August. No matter what the market has or has not done over the last 7 months, FLIR has not broken below $24. Below the $24 level is the 52-week low support at $22 (blue).

The Tale of the Tape: FLIR has a very important support at $75. A long trade could be made on a pullback to $24 with a stop placed under that level. IF the stock were to break below $24, a short trade should be made with a stop placed above $24.

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: Cimarex Energy Co. (NYSE: XEC)

Cimarex Energy Co. is an independent oil and gas exploration and production company. Its operations are located in Texas, Oklahoma, New Mexico, Kansas and Wyoming. As of year-end 2010, proved oil and gas reserves totaled 1.5 trillion cubic feet equivalent, consisting of 1.9 trillion cubic feet, consisting of 1.3 trillion cubic feet of gas and 105 million barrels of oil and natural gas liquids. In addition, Cimarex’s production averaged 595.9 million cubic feet equivalent per day, consisted of 363.9 million cubic feet of gas per day and 38,674 barrels of oil and natural gas liquids per day. Its exploration and development activities are conducted within three main areas: the Mid-Continent region, the Permian Basin and the Gulf Coast. During 2010, Cimarex sold oil and gas properties, mostly in Mississippi, and made property acquisitions, for additional interests in its western Oklahoma, Cana-Woodford shale play.

Please take a look at the 1-year chart of XEC (Cimarex Energy Co.) below with my added notations:

Over the last 8 months, XEC has formed a very important price level to watch at $70. As you can see from the chart above, $70 was a key resistance (navy) from August all the way up until February. That same $70 level should become support now that XEC is above it. Any break below $70 should bring the previous $60 level (green) back into play.

The Tale of the Tape: XEC has formed an important price level at $70. A long trade could be placed on any pullbacks to the $70 level with a stop placed under that level. IF the stock were to break below $70, a short trade would be advised with the expectation of a fall down to $60.

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: Volterra Semiconductor Corporation (NasdaqGS: VLTR)

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 such stock forming an up trendline is that of Volterra Semiconductor Corporation.

Volterra Semiconductor Corporation designs, develops and markets analog and mixed-signal power management semiconductors for the computing, storage, networking, and consumer markets. The company’s products are integrated voltage regulator semiconductors, integrated power protection and distribution semiconductors, and scalable voltage regulator semiconductor chipsets that transform, regulate, deliver and monitor the power consumed by digital semiconductors. Through its power system architecture and mixed-signal design techniques, it has integrated power, analog and digital circuits onto a single complementary metal oxide silicon semiconductor. The company sells its products primarily to original equipment manufacturers; original design manufacturers, contract equipment manufacturers, and merchant power supply manufacturers, directly through its internal sales force and indirectly through distributors and outsourced suppliers.

To review Volterra’s stock, please take a look at the 1-year chart of VLTR (Volterra Semiconductor Corporation) below with my added notations:

After bottoming at $18 in October of last year, VLTR has been in a steady up trend ever since. Along the way, VLTR 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 VLTR’s trend line is very important to the stock since it has been tested on multiple occasions. In addition, VLTR seems to have created a key short-term level at $32 (green).

The Tale of the Tape: VLTR 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 approaching the $32 support, with a stop placed under the entry. A short position could also be entered if VLTR were to break the trend line of support/$32 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

Today’s Big Stock: Ford Motor Company (NYSE: F)

Rectangle patterns are simple. Throughout the Today’s Big Stock newsletters, one of the more common patterns discussed is the Rectangle. Traders like these patterns because trading them is very simple, clear and straightforward. The latest Rectangle pattern in the long list I have highlighted would be that of Ford Motor Company.

Ford Motor Company is a producer of cars and trucks. The company and its subsidiaries also engage in other businesses, including financing vehicles. Ford operates in two sectors: Automotive and Financial Services. Its Automotive Sector includes Ford North America, Ford South America, Ford Europe and Ford Asia Pacific Africa. Financial Services includes Ford Motor Credit Company and Other Financial Services. Ford North America includes the sale of Ford- and Lincoln-brand vehicles and related service parts in North America, together with the associated costs to develop, manufacture, distribute and service these vehicles and parts. Ford Motor Credit Company includes vehicle-related financing, leasing, and insurance. Other Financial Services Includes a variety of businesses including holding companies and real estate.

To review Ford’s stock, please take a look at the 1-year chart of F (Ford Motor Company) below with my added notations:

F has been trading within a sideways Rectangle for the last (3) months. Rectangle patterns form when a stock gets stuck bouncing between a horizontal support and resistance. A minimum of (2) successful tests of the support and (2) successful tests of the resistance will give you the pattern. What’s great about a Rectangle pattern is that it not only provides you with trading points of support & resistance, but it also gives clearly defined breakout & breakdown points. For F, the Rectangle pattern formed a $13 resistance (red) and a $12 support (green).

The Tale of the Tape: F has formed a very common chart pattern know as a Rectangle. This pattern shows clear breakout and breakdown points for a potential long or short position. The possible long positions on F would be either on a pullback to $12, or on a breakout above $13. The short opportunities would be either at $13 or on a breakdown below $12.  With this type of pattern, some traders will commonly wait for the break of either the support or the resistance before making any trade.

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