A.O. Smith Corporation manufactures and sells water heaters and
boilers to the residential and commercial end markets primarily in the
United States, Canada, China, Europe, India, and the Middle East. It
operates in two segments, North America and Rest of World. The company
offers a line of electric, natural gas, liquid propane, solar tank, gas
tankless, and electric water heaters for applications in residences,
restaurants, hotels and motels, laundries, car washes, and small
businesses; and residential and commercial boilers primarily for space
heating applications in hospitals, schools, hotels, and other large
commercial buildings. It also provides boilers and expansion tanks,
commercial solar water heating systems, swimming pool and spa heaters,
and related products and parts. The company sells its products through
independent wholesale plumbing distributors, hardware and home center
chains, and manufacturer representative firms. It sells water heaters to
approximately 5,900 retail outlets, as well as water treatment products
to 2,900 retail outlets in China.
To review A.O.’s stock, please take a look at the 1-year chart of AOS (A.O. Smith Corporation.) below with my added notations:
AOS has formed a key level of support at $45.00 (blue) over the last
(3) months that it has been struggling to hold. In addition, the stock
has created a down trending resistance starting from the end of December
(green). These two lines combined have AOS stuck trading within a
common chart pattern known as a descending triangle, and at some point,
the stock has to break support or break its string of lower highs.
The Tale of the Tape: AOS has formed a descending
triangle pattern. A short trade could be made on a break of the $45.00
support level. A break through $47.00 would break the down trending
resistance and would set up a potential long trade.
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