magicJack VocalTec Ltd (NASDAQ: CALL)

magicJack VocalTec Ltd., together with its subsidiaries, operates as a cloud-based communications company that provides voice-over-Internet-Protocol (VoIP) services in the United States. The company’s products and services allow users to make and/or receive free telephone calls to and from where the customer has broadband access to the Internet. It offers magicJack VoIP device that enables customers to receive phone service for their home, enterprise, or while traveling; and magicJack PLUS, which contains a System on a Chip that connects a regular phone directly to the user’s broadband modem/router and function as a standalone phone without using a computer.

To review magicJack’s stock, please take a look at the 6-month chart of CALL (magicJack VocalTec Ltd.) below with my added notations:

6-month chart of CALL (magicJack VocalTec Ltd.)

CALL has formed a key price level of at $20.00 (purple) over the last (2) months that had most recently been support. In addition, the stock has potentially a down trending resistance that starts in mid-March (blue). The stock has started to recover from below $18 and should be approaching the $20 level soon, which may be where the down trending resistance is at that time.

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The Tale of the Tape: CALL is approaching potentially 2 resistances at $20. A short trade could be made on a rally up to $20, while a break above $20 would set up a potential long 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