Todays Big Stock: Lam Research Corporation (LRCX)

Lam Research Corporation is a supplier of wafer fabrication equipment and services to the worldwide semiconductor industry. Lam Research designs, manufactures, markets, refurbish, and services semiconductor processing equipment used in the fabrication of integrated circuits. Lam’s etch and clean technologies enable customers to build integrated circuits. It’s etch systems shape the microscopic conductive and dielectric layers into circuits that define a chip’s final use and function. Its Customer Support Business Group provides products and services to maximize installed equipment performance and operational efficiency. Its customer base includes semiconductor memory, foundry, and integrated device manufacturers that make DRAM, NAND, and logic devices for these products.

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

 

Over the last 7 months, LRCX has found common areas of support and/or resistance on or at the increments of $5. First, notice the $45 topside resistance (navy), which was also previous support in May. Next, you can see the $40 level (red) and the bottom level of support at $35 (green). The nice thing about LRCX 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 LRCX on rallies up to a $5 level or on any breakdowns of them. If you want a long play instead, you could buy LRCX on a pullback to a $5 level or on any breakout through one of those levels.

 

The Tale of the Tape: LRCX finds the levels of $5 important. These price points always appear to act as either support or resistance. If LRCX rallies back up to $40, you could enter a short play. If it breaks back above $40, you could enter a long play. You could also buy LRCX if it comes down to $35, or short the stock if it breaks that $35 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

Todays Big Stock: Lockheed Martin Corporation Com (NYSE: LMT)

Today’s article will be the final in the “New high” series. As a reminder, when it comes a stock hitting a 52-week high, I prefer to look for ones hitting a “NEW” high. To me, this 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. A stock that fits that description would be that of Lockheed Martin Corporation.

Lockheed Martin Corporation is a global security company engaged in research, design, development, manufacture, integration, and sustainment of advanced technology systems and products. It also provides a range of management, engineering, technical, scientific, logistic, and information services. It serves both domestic and international customers with products and services that have defense, civil, and commercial applications, with its principal customers being agencies of the United States Government. It operates in four business segments: Aeronautics, Electronic Systems, Information Systems & Global Services, and Space Systems.

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

LMT had been trading mostly sideways from February until July, while running into resistance at $82 (red). After a strong sell-off in July and August, the stock has worked its way back up to that $82 level. The $82 resistance meets my definition of a clear resistance level that would signify an important 52-week high breakout if LMT could manage to break above it.  The stock creating the up trending support (blue) line seems to imply an impending breakout. IF that were to happen, the stock would probably be heading higher, most likely on a new uptrend.

 

The Tale of the Tape: LMT has formed a key resistance level at $82, which would be a 52-week high breakout if LMT could break above it. A long trade could be entered if LMT breaks above $82, with a stop set below that level. A small “starter” position could also be entered AT the $80 level (teal), which could then be added to if the stock breaks out to the new high.

 

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

 

Todays Big Stock: Reynolds American Inc Common St (NYSE: RAI)

As mentioned in last week’s articles, I am going to focus on stocks that have recently hit new highs for the first couple articles this week. As a reminder, when it comes 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. Another stock that fits that description would be that of Reynolds American, Inc.

Reynolds American Inc. is a holding company. Reynolds’ operating subsidiaries include cigarette manufacturer in the United States, R. J. Reynolds Tobacco Company, and the smokeless tobacco products manufacturer in the United States, American Snuff Company, LLC. The company operates in two segments: RJR Tobacco and American Snuff. The RJR Tobacco segment consists of the primary operations of R. J. Reynolds Tobacco Company. The American Snuff segment consists of the primary operations of American Snuff Co. and Lane. Two of Reynolds’ wholly owned subsidiaries, Santa Fe Natural Tobacco Company, Inc., and Niconovum AB are among other segments.

Please take a look at the 1-year chart of RAI (Reynolds American, Inc.) below with my added notations:

RAI had a clear resistance at $40 (navy) prior to November. That $40 resistance met my definition of a clear resistance level that would signify an important 52-week high breakout if RAI could manage to break above it. As you can see, the stock finally broke through that $40 resistance in mid-November on big volume. The volume increase adds validity to the breakout. As expected, that previous $40 resistance has become a new support (l blue).

After the breakout above $40, RAI created a new resistance at $42 (red).  When you combine this fact, with the recognition of the previous levels at $36 (purple) and $38 (greens), it would appear the stock finds important price levels at the increments of $2.

The Tale of the Tape: RAI formed a key resistance level of $40, which was a 52-week high breakout when RAI broke above it. This should signal higher prices ahead for the stock. As expected, based on RAI’s previous pattern of forming levels on the 2’s, the stock has created a new resistance at $42. A long trade could be made on any pullbacks to the $40 level with an expectation of a run to at least $42 and most likely $44 (the next $2 increment up). A break of $40 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

Todays Big Stock: Alexion Pharmaceuticals, Inc. (NASDAQ: ALXN)

As I mentioned in yesterday’s article, I am going to focus on a stock that has recently hit new highs for this article. When it comes 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. Another stock that fits that description would be that of Alexion Pharmaceuticals, Inc.

Alexion Pharmaceuticals, Inc. is a biopharmaceutical company engaged in the discovery, development and commercialization of therapeutic products aimed at treating patients with severe and life-threatening disease states, including those in the therapeutic areas of hematology, nephrology (including transplant rejection), neurology, ophthalmology and cancer. Alexion’s marketed product, Soliris, is a therapy approved for the treatment of patients with paroxysmal nocturnal hemoglobinuria.

Please take a look at the 1-year chart of ALXN (Alexion Pharmaceuticals, Inc.) below with my added notations:

ALXN had been trading sideways for the past 3-4 months. During that time, the stock created a $70 resistance (navy), while holding support at $62.50 (green). That $70 resistance meets my definition of a clear resistance level that would signify an important 52-week high breakout if ALXN could manage to break above it. Last week the stock finally broke through that $70 resistance. As expected, that old $70 resistance has become a new support (l. blue) over the last week or so.

 

The Tale of the Tape: While trading sideways for a couple of months, ALXN formed a key resistance level of $70, which was a 52-week high breakout when ALXN broke above it. This should signaled higher prices ahead for the stock. A long trade could be made on any pullbacks to the $70 level. If the stock should happen to break below $70, the next entry for a long trade would be at the previous $62.50 level.

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

 

Todays Big Stock: Kirby Corporation Common Stock (NYSE: KEX)

For the next several articles, I am going to focus on stocks that have recently hit new highs and how to trade them. When it comes 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. One such stock that fits that description would be that of Kirby Corporation.

Kirby Corporation operates inland tank barges and towing vessels, transporting petrochemicals, black oil products, refined petroleum products and agricultural chemicals throughout the United States inland waterway system. It also owns and operates four ocean-going barge and tug units transporting dry-bulk commodities in United States coastwise trade. Through the diesel engine services segment, it provides after-market service for diesel engines and reduction gears. It has two segments: marine transportation and diesel engine services

Please take a look at the 1-year chart of KEX (Kirby Corporation) below with my added notations:

KEX had been trading sideways from March through October. During that time, the stock created a $60 resistance (navy). That $60 resistance meets my definition of a clear resistance level that would signify an important 52-week high breakout if KEX could manage to break above it. Well, back in October the stock finally broke through that $60 resistance. As expected, that old $60 resistance became a new support (l blue).

After the breakout above $60, KEX created a new 2-month resistance at $65 (green). The stock has broke above that level as well, and now that $65 level is acting as support (l green).

 

The Tale of the Tape: While trading sideways for most of the year, KEX formed a key resistance level of $60, which was a 52-week high breakout when KEX broke above it. This should signaled higher prices ahead for the stock. Now, the stock has created a new level at $65. A long trade could be made on any pullbacks to the $65 level. If the stock should happen to break below $65, the next entry for a long trade would be at the previous $60 level. A break of $60 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