Price matters and this article evaluates the immediate price levels of Visa (V), Linear tech (LLTC), and Conoco Phillips (COP). The purpose is to help both investors and traders make prudent decisions from this point with these companies.
For investors in the stock market two important factors play a role, but for traders only one of these really matters. Investors are people who get married to stocks, who intend on holding them for years, and therefore, before investors make decisions, they must do their homework.
By homework I mean they must investigate management, product cycles, competition, institutional ownership, cash flow, past EPS and Revenue growth, expected EPS and Revenue, debt levels, margins, and the list goes on. When you invest in a stock for the long run it is just like getting married to the company and it pays to know the family before you tie the knot.
However, after all that work is done another very important factor still remains, and it is this factor that traders focus on almost exclusively. After investors determine that they want to get married, they then need to determine where to get in. That means they need to evaluate price, something that traders use as a virtual stand-alone tool to make entry and exit decisions.
The notion of buy low sell high may seem like a thing of the past in this environment, but the simple rules of technical analysis still apply. This is how traders and investors evaluate price, by looking at the charts, and when they do a few things can be determined. By looking at multi-tier technical patterns we can determine if a stock is testing resistance, testing support, or some derivation of the same.
Only after such an evaluation will seasoned traders take action, that goes for professional investors as well, and evaluating price is exactly what we have been doing at Stock Traders Daily since January 2, 2000, the virtual peak of the Internet Bubble. I cannot tell you how important this is during market decline, but I think most of us can see that smaller investors don't care much about price based evaluations when markets go straight up.
This is very typical, but I want to offer a heads - up on a few stocks that were featured prominently in our filtering tools today. In the table below three of the featured stocks are listed.
Stocks to Watch:
Testing long term resistance
Testing long term resistance
Breaking below long term support
The Information above should help both traders and investors make decisions to buy or sell these companies respectively. When considering the above remember the notion of 'buy low - sell high' because it does matter, even though no one seems concerned with that in today's market. When stock test resistance, those are sell signals, and when stock break below support, stop-loss signals exist too. In the table above V and LLTC are testing resistance, and COP is breaking support.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Business relationship disclosure: By Thomas H. Kee Jr. for Stock Traders Daily and neither receives compensation from the publicly traded companies listed in this article.