As many of you may know if you have been following my breakdowns for some time, our key method of finding good trades is finding clear and straight forward setups, so we don’t have to be bogged down by a bevy of indicators. This simplicity makes executing on a trade all the more easy for us.

The more clear and obvious a setup is, the less we have to think, and the more we can focus on action. This kind of mentality is exactly why Agilent Technologies Inc. (A) has made it as our trade of the day. As you can see by the chart in the below video, A has drawn a clear line in the sand where the 130 level is acting as a major level of resistance.

If the stock and/or the market can find some strength in the next couple of trading sessions and break through this level of resistance, then we should see higher prices relatively quickly. How much higher? Well, if you look a bit further back in time on the price chart, we are able to figure out just where we might find the next level of resistance for the stock.

Looking at the chart, if we break through 130, our next stop looks to be at around 140. As you can see this is a meaningful level dating all the way back to last September. You can see if you draw a line across your chart that we have rejected several times at this 140 level. So, given this is the case, it is reasonable to assume this level will come back into play should the stock hit a rally.

If this stock can get going, this would open the door to another profitable swing trade, however, the best course of action with this trade would be to wait for some kind of confirmation to the upside. In other words, if the stock can breakthrough the 130 level, a good entry could be waiting for a retest of that level and, if it were to hold, then entering in anticipation of a move higher.

Another option would be to initiate a starter postion (not full size) and then add to it when you have confirmation of the upside move, keeping risk management tight, should the move deteriorate. Keep this stock on watch for a straight forward trade to the upside.

Learn to trade like this for yourself when you join The Profit Machine. There, you’ll learn all about my favorite stocks, setups, strategies, and plenty more. You’ll also be invited to weekly webinars where I answer questions and go over important trading lessons, like the one in today’s article. The best part, you’ll also receive live trade alerts. Not only will you get a world-class education, but you’ll earn while you learn.