Ingersoll-Rand designs, manufactures, sell, and services industrial and commercial products. It operates through Climate and Industrial segments.
Take a look at the 1-year chart of Ingersoll (NYSE: IR) below with the added notations:
After rallying to new highs consistently for the past 8 months, IR ended up stalling from the beginning of May until mid-June. During that time, the stock created a 52-week high resistance level at $90 (green). Once the stock broke out above that level, the $90 mark should provide support for a higher move.
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The Tale of the Tape: IR has a key level at $90. Traders could enter a long position on a test of $90, with a stop placed below that level. Traders that are bearish on the stock may want to enter a short position on a break below that level instead.
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!
Christian Tharp, CMT
Follow me on Twitter: @cmtstockcoach