Todays Big Stock: QuinStreet, Inc. (NasdaqGS: QNST)

QuinStreet, Inc. is engaged in vertical marketing and media on the Internet. QuinStreet operates in two segments: Direct Marketing Services (DMS) and Direct Selling Services (DSS). The DMS segment derives substantially all of its revenue from fees earned through the delivery of qualified leads or paid clicks. The DSS segment derives substantially all of its revenue from sale of direct selling services through a hosted solution. DSS revenue comprises set-up and professional services fees and usage fees.

To analyze QuinStreet’s stock for potential trading opportunities, please take a look at the 1-year chart of QNST (QuinStreet, Inc.) below with my added notations:

I like QNST because of the one simple price level at $10. Not only can you see the $10 support (navy) from a few months ago, but $10 has recently started to act as resistance (red) as well. So, the $10 price is key to this stock. If you are bearish, you might short QNST on any rallies up to $10. However, if you are bullish, you would want to see the stock break through the $10 resistance.

The Tale of the Tape: QNST presents a couple of very simple trading opportunities based on its key level of $10. A short position could be entered at the $10 resistance with a stop above that level, or a long play could be made on a break above $10 if that should happen.

Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.

No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade.  Capital preservation is always key!

Good luck!
Christian Tharp, CMT