United Technologies (UTX) left behind a rather ominous top after its steep July 25 selloff. The stock fell more than 2% that day after opening the session with an earnings-inspired downside gap. This breakdown move was a sharp reversal from earlier in the month when UTX reached new all-time highs. The stock is now approaching a major support zone and for patient investors, a low-risk entry opportunity is ahead for this B+ rated stock.

Back in late April, UTX began a fresh rally leg after clearing heavy resistance just below $115.00. The stock was pushing further into new high ground ahead of its April 26 earnings report. UTX surged once again in the upbeat news leaving behind layers of support in the process. Four months later, the stock is retesting this key area. If shares can regain their footing here, despite the ominous top near the $125.00 area, a very low risk entry opportunity will develop.

In the near term, patient UTX investors should keep a close eye on the $116.00 to $114.00 area. This major support zone includes the initial post election high as well as the upward sloping 200 day moving average. On the downside, a close back below $113.00 would be a clear warning sign that a deeper pullback may be on the way.

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