ServiceNow Inc (NYSE: NOW)

ServiceNow, Inc. provides cloud-based services to automate enterprise information technology (IT) operations worldwide. Its services include a suite of applications built on its proprietary platform that automates workflow and integrates related business processes. The company’s IT infrastructure library applications include Incident Management for restoring a failed service to an operational state; Problem Management for resolving service outages or issues affecting various users; Change Management that manages the proposal and approval process for changes to be made to the IT infrastructure; Release Management, which assigns, manages, and monitors the various tasks; Configuration Management Database, an inventory repository; Service Catalog; Knowledge Management for storing and displaying knowledge articles or documents; Service Portfolio Management; and Service Level Agreement Management to monitor and manage the progress by IT staff on assigned tasks. Its IT applications also include Project and Portfolio Management for tracking and managing projects; IT Cost Management to track staff work time, project-related expenses, and labor costs; IT Asset Management to track financial elements; IT Governance Risk and Compliance; Software Development Lifecycle Management; Discovery, which discovers and maps operational dependencies; and Runbook Automation to execute routine and repeatable projects.

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

1-year chart of NOW (ServiceNow, Inc.)

NOW has rallied from a bottom of $25 in January to a new 52-week high of $44 in April. 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 NOW’s trendline is important to the stock since it has been tested on multiple occasions.

The Tale of the Tape: NOW has created a nice trendline of support over the last (5) months. A long position could be entered on a pullback to that trendline, which is approaching $38, with a stop placed below that level. A short position could be entered if NOW were to break the trend line 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