NetSuite Inc (NYSE: N)

NetSuite Inc. provides cloud-based financials/enterprise resource planning (ERP) software suites in the United States and internationally. It offers NetSuite, a single platform for financials/ERP, customer relationship management (CRM), professional services automation (PSA), and e-commerce capabilities that automate processes across departments. The company also provides NetSuite OneWorld, which offers the ability to manage various companies or legal entities, with different currencies, taxation rules, and reporting requirements, within a single NetSuite account; NetSuite CRM+ that includes sales force automation, marketing automation, customer support, and service management functionality; and NetSuite OpenAir PSA, a PSA solution that is used by professional services organizations and is targeted to companies with thousands of employees, which provides a view into the services organization’s performance and profitability with dashboards and reports. In addition, it provides SuiteCommerce solutions for retail and B2B businesses; NetSuite Retail Anywhere, a point-of-sale solution to retail businesses; add-on modules; NetSuite industry editions; and SuiteCloud Platform that allows customers, partners, and developers to tailor and extend its suite to meet specific company, vertical, and industry requirements for personalization, business processes, and best practices.

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

1-year chart of N (NetSuite, Inc.)

N has almost doubled in price since its $40 bottom in May. Along the way, the stock has formed a nice trendline of support (blue). Always remember that any (2) points can start a trendline, but it’s the 3rd test and beyond that confirm its importance. Obviously N’s trendline is very important to the stock since it has been tested on multiple occasions. Another point worth noticing is N’s tendency to find support on the increments of $5 (red).

The Tale of the Tape: N has created a nice trendline of support over the last year. A long position could be entered on a pullback to that trendline, which is approaching $70, and $70 would make sense considering N’s common $5 supports. A short position could be entered if N were to break the trend line support.

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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