Autodesk, Inc. (NASDAQ: ADSK)

Autodesk, Inc. operates as a design software and services company worldwide. Its Platform Solutions and Emerging Business segment offers AutoCAD software, a computer-aided design (CAD) application for professional design, drafting, detailing, and visualization in construction, manufacturing, civil engineering, and process plant design fields; and AutoCAD LT, a professional drafting and detailing software. The company’s Architecture, Engineering and Construction segment offers Autodesk Revit products, which provide model-based design and documentation systems; AutoCAD Civil 3D products that offer a surveying, design, analysis, and documentation solution. Its Manufacturing segment provides AutoCAD Mechanical software to accelerate the mechanical design process; Autodesk Inventor, which offers a set of tools for 3D mechanical design, simulation, analysis, tooling, visualization, and documentation; and Autodesk Moldflow that facilitates manufacturers to design plastic parts and injection molds, and study the injection molding process. The company’s Media and Entertainment segment offers animation products that provide tools for digital sculpting, modeling, animation, effects, rendering, and compositing; and creative finishing products, which offer editing, finishing, and visual effects design and color grading solutions.

Autodesk’s stock is forming a head and shoulders (H&S) pattern. Please take a look at the 1-year chart of ADSK (Autodesk, Inc) below with my added notations:

1-year chart of ADSK (Autodesk, Inc)

Over the last (5) months ADSK has created a very important support level at $36 (red), which was a key level of resistance prior (navy). The $36 support is also the “neckline” for ADSK’s H&S pattern. Above the neckline you will notice the H&S pattern itself (blue). Confirmation of the H&S would occur if the stock were to break below its $36 support. If ADSK does break that level, the stock should move lower from there.

The Tale of the Tape: ADSK seems to have formed a head & shoulders pattern. Although a trader could go long at $36 expecting a bounce, the stock’s pattern implies an eventual breakdown. If that happens, a short trade should be entered on a break of the $36 level.

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