Nexstar Broadcasting Group, Inc. (NASDAQ: NXST)

Nexstar Broadcasting Group, Inc., a television broadcasting and digital media company, focuses on the acquisition, development, and operation of television stations and interactive community Websites in medium-sized markets in the United States. It provides free over-the-air programming to television viewing audiences. The company, through various local service agreements, also offers sales, programming, and other services to stations and digital multicast channels owned and/or operated by independent third parties. As of March 15, 2013, it owned, operated, programmed, or provided sales and other services to 72 television stations and 15 related digital multicast signals in 41 markets; and 43 community portal Websites that offered hyper-local content and verticals for consumers and advertisers.

Please take a look at the 1-year chart of NXST (Nexstar Broadcasting Group, Inc.) below with my added notations:

1-year chart of NXST (Nexstar Broadcasting Group, Inc.)

NXST had held an important level of support at $40 (red) for the last 5 months, and that level had also been a previous resistance. After resisting the $45 area couple of times this year, the stock came down to $40 yet again. Yesterday NXST finally broke below the $40 support and should be moving overall lower from here.

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The Tale of the Tape: NXST had a key level of support at $40. Now that the stock has broken support, a trader might want to enter a short trade at or near the $40 level with a stop placed above that level. A break back above $40 could 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