Wealth Blueprint Letter| Posted: April 23rd, 2015
Chart Industries, Inc. manufactures and sells engineered equipment for the industrial gas, energy, and biomedical industries worldwide. The E&C segment primarily provides brazed aluminum heat exchangers, Core-in-Kettle heat exchangers, air-cooled heat exchangers, and cold boxes for natural gas processing, liquefied natural gas (LNG), and industrial gas applications. The D&S segment designs, manufactures, services, and maintains bulk and packaged gas cryogenic solutions for the storage, distribution, vaporization, and application of industrial gases; and offer cryogenic components, including vacuum insulated pipe, engineered bulk gas installations, specialty liquid nitrogen, end-use equipment, and cryogenic flow meters. The BioMedical Segment offers respiratory oxygen product line that comprises medical respiratory products, including liquid oxygen systems and stationary, transportable, and portable oxygen concentrators, which are primarily used for the in-home supplemental oxygen treatment of patients with chronic obstructive pulmonary diseases.
Take a look at the 1-year chart of Chart (NASDAQ: GTLS) below with the added notations:
GTLS declined rapidly last summer and fell all the way down to it’s January low. The stock has since rallied more than 50 percent. Over the last 6 months the $40 price level (blue) has become somewhat important to the stock. Not only was $40 a key support in October, as well as resistance in March and April, but that level has also been a recent support for the GTLS here as of late.
The Tale of the Tape: GTLS has a key level at $40. A trader could enter a long position on a pullback down to $40 with a stop placed under the level. However, if the stock were to break back below $40, 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!
Christian Tharp, CMT