Outerwall Inc (NASDAQ: OUTR)

Outerwall Inc., through its subsidiaries, provides automated retail solutions primarily in the United States, Canada, Puerto Rico, Ireland, and the United Kingdom. Its Redbox segment owns and operates approximately 43,700 self-service Redbox kiosks in 35,800 locations that enable consumers to rent or purchase movies and video games, as well as purchase event tickets. The company’s Coin segment owns and operates approximately 20,300 self-service coin-counting kiosks in 20,100 locations, which enable consumers to convert their coin to cash, a gift card, or an E-certificate. Its New Ventures segment focuses on identifying, evaluating, building, and developing innovative self-service concepts in the automated retail space, which includes coffee, refurbished electronics, and photo self-service concepts. The company’s kiosks are located primarily in supermarkets, drug stores, mass merchants, financial institutions, convenience stores, and restaurants. The company was formerly known as Coinstar, Inc. and changed its name to Outerwall Inc. in June 2013

Please take a look at the 1-year chart of OUTR (Outerwall, Inc.) below with my added notations:

1-year chart of OUTR (Outerwall, Inc.)

This stock is very simple. OUTR had held a very important level of support at $65 (blue) for the last 3 months, which was also a previous resistance. Regardless of what the market has or has not down over the last few months though, the stock had never broken the $65 level. Well, this past Friday OUTR broke below the $65 support and should be moving overall lower from here.

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The Tale of the Tape: OUTR had a key level of support at $65. Now that the stock has broken support, a trader might want to enter a short trade at or near the $65 level with a stop placed above that level. A break back above $65 would negate the forecast for a move lower.

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