Today’s Big Stock: Riverbed Technology, Inc. (NasdaqGS: RVBD)

Riverbed Technology, Inc. has developed solutions to the fundamental problems associated with information technology (IT) performance across wide area networks (WANs). Riverbed’s family of performance products includes solutions for branch offices, mobile workers, private data centers, private clouds and cloud computing. Riverbed’s products include Steelhead products and Cascade product line. The company’s solution, the Riverbed Optimization System, consists of hardware and software products that address the fundamental performance limitations of distributed computing environments. Riverbed’s flagship Steelhead products enable its customers to improve the performance of their applications and access to their data across WANs, by increasing transmission speeds by 5 to 50 times and in some cases by up to 100 times.

To review Riverbed’s stock, please take a look at the 1-year chart of RVBD (Riverbed Technology, Inc.) below with my added notations:

RVBD has created a couple of important price levels to watch. First, RVBD has formed a clear resistance at $30 (navy), which would also be an 8-month high breakout if RVBD could manage to move above it. In addition, the stock is climbing a short term, up-trending support level (blue) over the last 5+ months. These two levels combined have RVBD stuck within a common chart pattern known as an Ascending Triangle. Eventually, the stock will have to break one of those (2) levels.

The Tale of the Tape: RVBD has an up trending support and a clear $30 resistance level to watch. A long trade could be made on a pullback to the support, or on a break above $30. A break below the up trending support would be an opportunity to enter a short trade.

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