Todays Big Stock: Sify Technologies Limited (NasdaqGM: SIFY)

As I stated in the ACTG article I wrote, trading in the stock market can at times be complicated, confusing and challenging to know what trade to make and when to make it. However, there are those trading opportunities like ACTG that are clear and somewhat obvious. Keep in mind that clear, obvious or not, that doesn’t necessarily mean the trade will always work out in your favor. Another stock that appears to have a “simple” trading opportunity would be that of Sify Technologies Limited.

Sify Technologies Limited (Sify) is an integrated Internet, network and electronic commerce services companies in India, offering end-to-end solutions with a range of services delivered over a common Internet backbone infrastructure. Sify’s services enable its business and consumer customers to communicate, transmit and share information, access online content and conduct business remotely using its private data network or the Internet. Sify’s segments comprised: corporate network/data services, which provides Internet, connectivity, security and consulting, hosting and managed service solutions; Internet access services, from homes and through cybercafes, online portal services and content offerings, and other services, such as development of e-learning software.

Before discussing potential trading opportunities, please take a look at the 1-year chart of SIFY (Sify Technologies Limited) below with my added notations:

Although I don’t normally look at stocks below $10, I know a lot of traders do. Well, isn’t the trade on SIFY relatively obvious? SIFY had been holding a very important level of support at $4 for several months. After breaking lower, the stock rallied back above that $4 level at the end of October. Now that SIFY is back above $4, traders would expect that level to start acting as support again if the stock were to ever come back down to it.

The Tale of the Tape: SIFY has a very important support level at $4. If the stock were to approach that level again, a trader could enter a long position with a stop under that level. However, if SIFY were to break that support, a short position could be entered with the expectation of a fall down to the $3 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

Todays Big Stock: Complete Production Services, Inc. (CPX)

As the market has rallied from the beginning October, some stocks have managed to get back up to their respective August breakdown points, or even higher. Those previous breakdown levels will usually provide strong resistance when approached and strong support if stocks get back above them. One stock that has hit a couple of breakdown levels, and even broke above one of them, would be that of Complete Production Services, Inc.

Complete Production Services (CPS) provides specialized completion and production services and products that help oil and gas companies to develop hydrocarbon reserves and enhance production. The company operates in basins within North America, and manages its operations from regional field service facilities. CPS operates through three business segments. Through its completion and production services segment, the company establishes, maintains and enhances the flow of oil and gas throughout the life of a well. Through its drilling services segment, it contract drilling and specialized rig relocation and logistics services. Through its product sales segment, the company provides oilfield service equipment and refurbishment of used equipment through its Southeast Asian business, and provides repair work and fabrication services for its customers at a location in Gainesville, Texas.

Before discussing potential trading opportunities, please take a look at the 1-year chart of CPX (Complete Production Services, Inc.) below with my added notations:

As you can see from the chart above, CPX has a very common price level at $30 (navy). The stock also has a frequent level at $35 (red & green). Both of these levels broke in August and the stock moved lower as one would expect. Since bottoming in October, CPX has rallied to break back above the $30, but now the stock has been sitting under the $35 level for a couple of weeks.

The Tale of the Tape: CPX has broken back above its $30 level and now sits under the $35 level. A long trade could be made on a break above $35 or on a pullback down to $30. Short traders could enter a trade at $35 or on a break back below $30. Stops should be placed under the level of entry on longs or above the level of entry on shorts.

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: Acacia Research Corporation (NasdaqGS: ACTG)

Trading in the stock market can at times be complicated and confusing. It can be challenging to know what trade to make and when to make it. However, there are those trading opportunities that are clear and somewhat obvious. Usually, the “keep it simple stupid” trades tend to be the best anyway. Keep in mind that regardless of simple or not, that doesn’t necessarily mean the trade will always work out in your favor. One stock that appears to have a “simple” trading opportunity would be that of Acacia Research Corporation.

Acacia Research Corporation through its operating subsidiaries, acquires, develops, licenses and enforces patented technologies. The Company’s operating subsidiaries generate revenues and related cash flows from the granting of rights for the use of patented technologies, which its operating subsidiaries own or control. Its operating subsidiaries assist patent owners with the prosecution and development of their patent portfolios, the protection of their patented inventions from unauthorized use, the generation of licensing revenue from users of their patented technologies and, if necessary, with the enforcement against unauthorized users of their patented technologies.

Before discussing potential trading opportunities, please take a look at the 1-year chart of ACTG (Acacia Research Corporation) below with my added notations:

It’s relatively obvious, isn’t it? ACTG has been holding a very important level of support in the area of $32.50 (green) for the last 9 months. No matter what the market has or has not done this year, ACTG has not broken below that general area of support.  If the market should move lower, ACTG will most likely retest its support level for a potential trade.

The Tale of the Tape: ACTG has held a very important support level at $32.50 since March. If the stock were to approach that level again, a trader could enter a long position with a stop under that level. If ACTG were to break that support, a short position could be made with the expectation of a fall down to the $30 level (red) where another long trade could be placed.

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: EMC Corporation (NYSE: EMC)

As the market has rallied from the beginning October, some stocks have managed to get back up to their respective August breakdown points. Those breakdown points will usually provide strong resistance when approached. A stock that may be hitting that area of strong resistance now would be that of EMC Corporation.

EMC Corporation develops, delivers and supports the information technology industry’s range of information infrastructure and virtual infrastructure technologies, solutions and services. EMC provides information storage, back-up and protection, management, security, information intelligence, data computing and virtualization technologies, services and solutions. EMC operates in two business categories: EMC Information Infrastructure and VMware Virtual Infrastructure. EMC Information Infrastructure provides a foundation for organizations to store, manage, protect, analyze and secure information and enhance their advantage within traditional data centers, virtual data centers and cloud-based IT infrastructures.

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

 

As you can see from the chart above, EMC has a very important price level at $25 (purple). After struggling with the $25 resistance in January, EMC broke above that level and continued to bounce on it as support over the next several months. In August, EMC broke that $25 support and fell lower as one would expect. After finding support at $20 (pink) for a few months, the stock has rallied back up to the $25 level only to find resistance again over the last couple of weeks.

The Tale of the Tape: EMC has approached its $25 level again. For those traders waiting for an opportunity to enter a long position, EMC breaking above $25 would provide that trade.  Short traders might want to enter a trade at the $25 with an expectation of a fall back down to the $23 level (teal). Other long trades could be made on a pullback to $23 or down at $20 if that were to happen. A short trade could also be made if the stock broke below $23.

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: TRW Automotive Holdings Corpora (NYSE: TRW)

TRW Automotive Holdings Corp. is a diversified supplier of automotive systems, modules and components to automotive original equipment manufacturers and related aftermarkets. It conducts substantially all of its operations through subsidiaries. These operations encompass the design, manufacture and sale of active and passive safety related products. Active safety related products refer to vehicle dynamic controls, and passive safety related products principally refer to occupant restraints (primarily airbags and seat belts) and safety electronics (electronic control units and crash and occupant weight sensors). TRW operates in four segments: Chassis Systems, Occupant Safety Systems, Electronics and Automotive Components.

Please take a look at the 1-year chart of TRW (TRW Automotive Corp.) below with my added notations:

Notice all of the important price levels I have highlighted on TRW. Over the last 3 months, the stock seems to always find support or resistance on or at the increments of $5. First, notice the $45, topside resistance (red). Next, you can see the common $40 (navy) and $35 (green) levels. In October, the stock bottomed at $30 (pink). The great thing about TRW 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 TRW on rallies back up to any $5 level. If you want a long play, you could buy TRW on any pullback to a $5 level or breakout through one of those levels.

The Tale of the Tape: TRW finds the levels of $5 important. These price points always appear to act as either support or resistance or usually both. You can trade this stock no matter what it does. If it 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 buy TRW 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