Beyond The Biotech Space - Illinois Tool Works, Inc (NYSE: ITW)

ITW’s level at $96

ITW rallied in October and November, traded sideways for two months, and then rallied to new highs again. 

In addition, over the lat 6 months the $96 price level (blue) has become very important to the stock. Not only was $96 a key resistance in December, as well as support in March and April, but that level has also been a recent resistance in the beginning of May.

The Tale of the Tape

ITW has a key level at $96. A trader could enter a long position on a pullback down to $96 with a stop placed under the level. However, if the stock were to break back below $96, a short trade could be made 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!

Good luck!

The Biotech Trader

@TraderBiotech

Posted to The Biotech Trader on May 21, 2015 — 8:05 AM
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