Todays Big Stock: Vistaprint N.V. (NasdaqGS VPRT)

Vistaprint N.V. is an online provider of coordinated portfolios of customized marketing products and services to micro businesses worldwide. Vistaprint offers a spectrum of complementary products and services ranging from business cards, brochures and post cards to customized apparel, invitations and announcements, holiday cards, calendars, direct mail services, promotional gifts, signage, Website design and hosting services and e-mail marketing services. Its Internet-based order processing systems receive and store tens of thousands of individual orders on a daily basis and, using complex algorithms, organize these orders for efficient production and delivery to its customers. During the fiscal year ended June 30, 2011, its customers placed approximately 22.9 million orders.

To review Vistaprint’s stock, please take a look at the 1-year chart of VPRT (Vistaprint N.V.) below with my added notations:

After falling off a cliff in July, VPRT created a clear resistance at $30 (red). As expected, that same $30 level became a new support (green) once the stock broke back above it in October. VPRT has also formed an important trend line of resistance (navy) since May. Always remember, any (2) points can start a trend line, but it’s the 3rd test and beyond that confirm its importance. As you can see, VPRT’s trend line has already been tested (4) times, so it is definitely important to the stock.

The Tale of the Tape: VPRT has created a nice downtrend line of resistance, as well as an important level at $30. A short position could be entered on a rally up to the trend line resistance, or on a break below the $30 support. Although a long position could be entered on a pullback to the $30 support, a more probable long trade would be if VPRT breaks through the trend line resistance.

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