Thomson Reuters Corporation (NYSE: TRI)

Thomson Reuters Corporation is a provider of information for the world’s businesses and professionals. The company is organized in four business units: Financial & Risk, a provider of news, information and analytics; Legal, a provider of critical information, decision support tools, software and services to legal, investigation, business and Government professionals worldwide; Tax & Accounting, a provider of integrated tax compliance and accounting information, software and services for professionals in accounting firms, corporations, law firms and Government, and Intellectual Property & Science, a provider of intellectual property and scientific resources. Thomson Reuters’ corporate headquarters are located in New York, New York with key operations in the United Kingdom, India, Eagan, Minnesota and Stamford, Connecticut. It operates in over 100 countries.

To review Thomson’s stock, please take a look at the 1-year chart of TRI (Thomas Reuters Corporation) below with my added notations:

TRI has created a couple of important price levels to watch. First, the stock has formed a clear resistance at $30 (red), which would also be an 8-month high breakout if TRI could manage to move above it. In addition, the stock is climbing a short term, up-trending support level (green) over the last 4 months. Eventually, the stock will have to break one of those (2) levels.

The Tale of the Tape: TRI has an up trending support and a clear $30 resistance level to watch. A long trade could be made on a pullback to the support, currently nearing $28, or on a breakout above $30. A break below the up trending support would be an opportunity to enter a short 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

Ryland Group Inc. (NYSE: RYL)

Probably one of the more common pattern discussed in the Today’s Big Stock newsletters 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 Cliffs Natural Resources, Inc.

The Ryland Group, Inc. is a homebuilders and a mortgage-finance company. In addition, Ryland Mortgage Company and its subsidiaries, and RMC Mortgage Corporation provide mortgage financing and related services. The company consists of six operating business segments. All of Ryland’s business is conducted and located in the United States. The company’s operations span aspects of the home buying process from design, construction and sale to mortgage origination, title insurance, escrow and insurance services. During the year ended December 31, 2011, the homebuilding operations were consisted of approximately 97% of consolidated revenues. The homebuilding segments generate their revenues from sales of completed homes, with sales of land and lots. In addition to building single-family detached homes, the homebuilding segment also builds attached homes, such as townhomes, condominiums and some mid-rise buildings, which share common walls and roofs.

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

RYL 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 RYL, the Rectangle pattern formed a $21 resistance (blue) and a $17 support (green).

Chart patterns can also provide price targets. Simply take the height of the overall pattern and add or subtract that amount to or from the breakout or breakdown point to get the minimum price objective. For example, since the Rectangle pattern for RYL is $4 high ($21 – $17), RYL should climb to a minimum of $25 ($21 + $4) now that the stock has broken through resistance.

The Tale of the Tape: RYL formed a very common chart pattern know as a Rectangle. Last week the stock broke through resistance and should be headed higher overall. A long trade could be made on any pullbacks to the $21 area.

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

Teradyne Inc. (NYSE: TER)

Teradyne, Inc. is a global supplier of automatic test equipment. The company designs, develops, manufactures and sells automatic test systems and solutions used to test complex electronics in the consumer electronics, automotive, computing, telecommunications, wireless, and aerospace and defense industries. Teradyne’s automatic test equipment products and services include semiconductor test systems, military/aerospace test instrumentation and systems, storage test systems, and circuit-board test and inspection systems (collectively these products represent Systems Test Group), and wireless test systems.

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

TER has created a couple of short-term price levels over the last 3 months. First, TER has formed a clear resistance at $17.50 (blue). In addition, the stock has been climbing higher on an up-trending support level (red) during that same period of time. These two levels combined had TER stuck within a common chart pattern known as an Ascending Triangle. Eventually, TER will have to break one of those (2) levels.

The Tale of the Tape: A long trade could be made on TER if the stock breaks out through the $17.50 level, with a stop placed under that level. A pullback to the trend line support could also provide a long trade. However, a break of that support line would be an opportunity to enter a short trade on the stock.

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

Kansas City Southern (NYSE: KSU)

For today’s article I will be focusing on a stock that has broken out to a 52-week high. As a reminder, when it comes to a stock hitting a 52-week high, I prefer to look for ones hitting a “NEW” high. To me, his would be a stock that hasn’t hit a new 52-week high in quite some time. In addition, and more importantly, I want the stock to have broken through a key area of resistance. This way I know that it wasn’t just any move higher, it was a key breakout.

Kansas City Southern is a transportation holding company that has railroad investments in the United States, Mexico and Panama. In the United States, the company serves the central and south central United States. Its international holdings serve northeastern and central Mexico and the port cities of Lazaro Cardenas, Tampico and Veracruz, and a 50% interest in Panama Canal Railway Company provides ocean-to-ocean freight and passenger service along the Panama Canal. KCS’s North American rail holdings and alliances are primary components of a NAFTA railway system, linking the commercial and industrial centers of the United States, Canada and Mexico.

Please take a look at the 1-year chart of KSU (Kansas City Southern) below with my added notations:

Over the last (4) months, KSU has created a clear resistance at $75 (navy). That $75 resistance meets my definition of a clear resistance level that would signify an important 52-week high breakout if KSU could manage to break above it. Well, as you can see, the stock finally broke through that $75 resistance yesterday. The stock should be heading higher overall from here.

The Tale of the Tape: KSU formed a key resistance level of $75, which was a 52-week high breakout when the stock broke above it. A long trade could be made on any pullbacks to the $75 level with a stop placed under that level. A break back below $75 would negate the forecast for the stock to move higher.

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

Georgia Gulf Corp. (NYSE: GGC)

Georgia Gulf Corporation is a manufacturer and international marketer of two integrated chemical product lines, chlorovinyls and aromatics. The company’s primary chlorovinyls products are chlorine, caustic soda, vinyl chloride monomer (VCM), vinyl resins and vinyl compounds, and its aromatics products are cumene, phenol and acetone. The Company operates through four segments: chlorovinyls; window and door profiles and moldings products; outdoor building products and aromatics. The chlorovinyls segment is a integrated chain of products, which includes chlorine, caustic soda, ethylene dichloride, VCM and vinyl resins and compounds. The company’s vinyl-based building and home improvement products are primarily marketed under the Royal Group brand names, and are managed within two segments, window and door profiles and moldings.

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

GGC has created a couple of short-term price levels over the last 3 months. First, GGC has formed a clear resistance at $35 (navy). In addition, the stock has been climbing higher, possibly on an up-trending support level (blue), during that same period of time. These two levels combined had GGC stuck within a common chart pattern known as an Ascending Triangle. Eventually, GGC will have to break one of those (2) levels.

The Tale of the Tape: A long trade could be made on GGC if the stock breaks out through the $35 level, with a stop placed under that level. A pullback to the trendline support could also provide a potential long 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