Trade Ideas Newsletter 07/28/2016

PM is at the beginning of a significant breakdown

Based on the previous analysis in PM, traders should ensure that their portfolio can handle increased risk from an additional trade. Also check to make sure that PM increases diversification of your current portfolio. Lastly, smart traders check how a new position relates to not just their account, but the current market action as well. For example, take a look at the S&P 500. Is it moving higher or lower? Has it recently moved through a key resistance or support level? Be sure to match up your trading actions on PM in relation to the overall market movement.

CHART

Right now the custom sentiment levels, measured by Traders For Wealth, indicate an increasingly negative bias toward PM. In addition, the price action in PM has been moving down as well. This could be a strong sign of an impending breakdown. Traders should view this as a very bearish trade and make sure it matches up with the overall market, and their current portfolio.

Philip Morris International Inc (PM)

Philip Morris International Inc. is a holding company engaged in the manufacture and sale of cigarettes, other tobacco products and other nicotine-containing products in markets outside of the United States. The Company’s products are sold in over 180 markets. Its segments include European Union; Eastern Europe, Middle East & Africa; Asia, and Latin America & Canada. The Company’s premium price brands include Marlboro, Merit, Parliament and Virginia Slims; mid-price brands include L&M and Philip Morris, and other international brands include Bond Street, Chesterfield, Lark, Muratti, Next and Red & White. Its local cigarette brands consist of Dji Sam Soe, Sampoerna and U Mild in Indonesia; Champion, Fortune and Hope in the Philippines; Apollo-Soyuzand Optima in Russia; Morven Gold in Pakistan; Boston in Colombia, Belmont, Canadian Classics and Number 7 in Canada; Best in Serbia; f6 in Germany; Delicados in Mexico; Assos in Greece, and Petra in the Czech Republic and Slovakia.