VMware, Inc. (NYSE: VMW)

VMware, Inc. provides virtualization infrastructure solutions in the United States and internationally. The company’s solutions enable organizations to aggregate multiple servers, storage infrastructure, and networks together into shared pools of capacity that can be allocated to applications as needed. Its cloud infrastructure products and technologies include its flagship data center platform, VMware vSphere, which enables users to deploy hypervisor, a layer of software that resides between the operating system and system hardware to enable compute virtualization; and vCloud Suite, an integrated solution for building and managing a cloud infrastructure optimized for use with the VMware vSphere platform. The company also provides end-user computing solutions, which are designed to enable a user-centric approach to personal computing, and secure access to applications and data from various devices and locations; and cloud application platform solutions providing open source application frameworks, application run-time, and data management solutions, as well as an open platform as a service.

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

1-year chart of VMW (VMware, Inc.)

VMW has formed a solid support at $70 (navy), which would also be a 52-week low breakdown if the stock breaks below it. In addition, the stock has formed a potential trendline of resistance (blue). These two levels combined have VMW sandwiched within a common chart pattern known as an descending triangle. At some point, the stock will eventually have to break one of those two levels.

The Tale of the Tape: VMW has a down trending resistance and a 52-week support level to watch. A long trade could be made on a breakout above the downtrending resistance or on a pullback to the support. A break below the $70 support would be an opportunity to enter a short trade.

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