ITG (Friday close at 20.41)

ITG reached a major level of support on the weekly intra-day and closing chart this past week when it reached the $20 level. Over the past 10 years the $20 level has been a major pivot point and having reached that level this past week, at a time that the market seems be getting into a corrective phase, likely will cause a short-covering ally to occur.

In addition, the stock made a new 2-week low on Friday but failed to generate strong selling and ended up closing at the low of the last two weeks. If there is any follow through to the upside this week, that action will be seen as a failure-to-follow-through signal.

On a weekly closing basis, support is major between 19.58 and 20.43, with the 20.43-20.10 level being the most recent and strongest. On a daily closing basis, the support between 20.35 and 20.75 is considered very strong. On an intra-day basis, the drop on Friday down to 19.76 must be considered support as well. On a weekly closing basis, there is minor resistance between 23.67 and 24.44. Nonetheless above that level, there is little resistance until the 28.29 level is reached and that resistance must be considered minor. On a daily closing basis, resistance is found at 23.30 from the most recent daily high close as well as from the 20-day MA. Stronger resistance will be found up at 24.49 from a daily closes of some consequence, and then nothing of consequence until the 50-day MA is reached, presently up around the $30 level.

Though ITG did not participate in this week's index rally and made new lows at a time the market was showing strength, it is important to note that the level that was reached is of major importance and support.

Purchases of ITG between Friday's close of 20.40 and 20.03 level and using a stop loss at 19.66 and having a minimum objective of a rally back up to the most recent intra-day high up at 23.67, will offer a risk/reward ratio of around 4-1. Should the stock be able to break above the 23.67 level intra-day high as well as the 20-day MA at the same price, rallies up to at least 26.15 will likely occur, thus making the risk/reward ratio more attractive.

My rating on the trade is a 6.5 (on a scale of 1-10 with the strongest probability rating being 10).

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