March & McLennan
You don't have to be an expert technical analyst to spot what's going on in shares of Marsh & McLennan (MMC - Get Report). The $20 billion risk advisory firm has been trading within an uptrending price channel for the last few quarters.
That price channel gives traders a high probability range for MMC's trading to remain within, a big advantage when trying to figure out what to do with this stock. The most important level to watch is trend line support; it's a level where MMC has been able to catch a bid and reverse on its last nine drops, and it's likely to remain an important downside barrier.
When you're looking to buy a stock within a trend channel, buying after a bounce off of support makes sense for two big reasons: It's the spot where shares have the furthest to move up before they hit resistance, and it's the spot where the risk is the least (because shares have the least room to move lower before you know you're wrong).The 50-day moving average has been a good proxy for support over the course of the pattern. That's where I'd recommend putting a protective stop on this trade.