Rockwell Automation Inc. engages in the provision of industrial automation and information services. It operates through the following segments: Architecture and Software, and Control Products and Solutions.
Take a look at the 1-year chart of Rockwell (NYSE: ROK) below with the added notations:
Over the course of the past several weeks, ROK has formed an important level to watch at the $200 (blue) mark. That level was resistance back in April and has since been tested as support twice. ROK is currently hovering above that level now, and a decline could bring another support test.
The Tale of the Tape: ROK has a key level at $200. A trader could enter a long position on a pullback down to that level with a stop placed under it. However, if traders are bearish on the stock, a short trade could be made on a break back below the $200 mark.
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
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ROK shares rose $1.37 (+0.65%) in premarket trading Tuesday. Year-to-date, ROK has gained 5.67%, versus a -1.75% rise in the benchmark S&P 500 index during the same period.
About the Author: Christian Tharp
Christian is an expert stock market coach at the Adam Mesh Trading Group who has mentored more than 4,000 traders and investors. He is a professional technical analyst that is a certified Chartered Market Technician (CMT), which is a designation awarded by the CMT Association. Christian is also the author of the daily online newsletter Todays Big Stock. More...
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