A good Defense can be a great Offense

Recently I was on a plane coming back from Florida. I was there on a project with my company. I got an upgrade to First class and found myself sitting next to an gentleman from Harris Corp. I promised him that I would look up the chart on Harris, ticker symbol HRS and put in a blog entry.

Harris Corp. makes sophisticated radios for the US Army. It is an international communications and informational technology company in the defense sector. The company has about $6 billion in annual revenue and 16,000 employees with about 7,000 engineers and scientists.

I am a technical trader. I trade from the charts, and not the news or the fundamentals. The chart includes all the information from the fundamentals. If the fundamentals are bad, the chart shows the weakness. If the fundamentals are strong and profit potential good, the chart shows that too with nice upward movements. Beyond that are of course the effects of the geo-political factors and the current state of the economy. So what do the charts say about HRS?

The daily chart of HRS has been on a tear lately and shows a nice uptrend. The trading system I am using here demonstrates the use of both major and minor signals. The major signal is currently an Up arrow and signals the direction of the trend. The minor signals allow you more precise entry and exit points for shorter term gains. The idea here is to trade in the direction of the major arrows using the minor signals to either swing trade or add to or take profits. Or one could just use the major signals for entry/exit. Right now the major trend is Up and the minor signals is also up, I would wait for a pullback and the next minor up signal to enter.

There is a point of caution however – the stock is now approaching its resistance line drawn as a blue horizontal line at a price of $54.50. If it breaks out past the resistance line, that would indeed be bullish and a great point of entry. HRS appears to have good fundamentals and is most likely going to get above $54.50. But it is best not to anticipate the breakout and just wait for it to happen. It could be a nice trade after it breaks out. A good defense could be a great offense..