VeriFone Systems Inc (NYSE: PAY)

VeriFone Systems, Inc. designs, markets, and services electronic payment solutions worldwide. It provides countertop electronic payment systems that accept magnetic, smart card, contactless or radio frequency identification cards, and near field communication(NFC) payment options, as well as support credit, debit, check, EBT, and pre-paid products; an array of software applications and application libraries; and mobile solutions that support CDMA, GPRS, Bluetooth, and WiFi technologies. The company also offers products for consumer-facing functionality at the point of sale; contactless/NFC payment solutions consisting of contactless readers for consumer-facing transactions for indoor and outdoor payment system solutions; and integrated electronic payment systems that combine electronic payment processing, fuel dispensing, and ECR functions, as well as payment systems for integration.

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

1-year chart of PAY (Verifone Systems, Inc.)

PAY has consistently hit resistance at $24 (red) during the last (6) months. In addition, the stock has formed a clear trendline of support (blue) starting back in June. The resistance has been tested on a dozen different days and the support has been tested on 9 different occasions. At some point, the stock has to break through one of those two levels.

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The Tale of the Tape: PAY has a clear level of support and resistance. A long trade could be made on a pull back to $22 (trendline support) or on a break above $24. A break back below $22 would set up a possible short trade.

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

Follow me on Twitter: @cmtstockcoach