CommVault Systems, Inc. (NASDAQ: CVLT)

CommVault Systems, Inc., together with its subsidiaries, provides data and information management software applications and related services primarily in North America, Europe, Australia, and Asia. The company develops, markets, and sells a suite of software applications and services under the Simpana brand. Its Simpana software suite includes solution for the backup and restoration of enterprise data for file systems, applications, databases, and virtual machine systems; integrated data archiving solution that optimizes data tiering and improves information governance; and enterprise-wide storage optimization for email and files reducing space on primary storage. The company also provides solutions for protection of critical applications and data with snapshots and real-time replication; solutions to analyze, discover, track, trend, and report on physical and virtual storage usage; and Web browser, which allows search, sort, select, and retrieval of corporate files and information from online, archive, and backup data copies. In addition, it offers assessment and design, implementation and post-deployment, training, consulting, and customer support services.

Please take a look at the 1 yr. chart of CVLT (CommVault Systems, Inc.) that I have shown below with my added notations:

1 yr. chart of CVLT (CommVault Systems, Inc.)

CVLT has formed a nice up-trending channel over the last (9) months. A channel is simply formed through the combination of a trend line support that runs parallel to a trend line resistance. When it comes to a channel, I always tell my students that any (3) points can start the channel, but it’s the 4th test and beyond that confirm it. You can see that CVLT has multiple test points between the channel resistance (red) and channel support (blue). Following the CVLT channel can provide you with both long and short trading opportunities.

The Tale of the Tape: CVLT has formed a common chart pattern know as a channel, in this case, an up-channel. A long opportunity could be entered on a pullback to the channel support, which at this point seems to be around $375. Short trades could be entered at channel resistance OR if CVLT were to break below the channel support.

Would you like assistance in making your TBS trades? If so, email me at Christian@yolopub.com and let’s talk about working together one on one!

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