Liberty Interactive Corp (NASDAQ: LINTA)

Liberty Interactive Corporation, through its subsidiaries, is engaged in the video and on-line commerce industries in North America, Europe, and Asia. The company markets and sells various consumer products primarily through live televised shopping programs, and Websites and other interactive media, including QVC.com. It also operates Websites offering sports gear and clothing for outdoor and active individuals in various categories; sports nutrition, body building, and fitness products; costumes, accessories, d├ęcor, party supplies, and invitations; and perishable goods, including flowers, fruits, and desserts, as well as personalized gifts. In addition, Liberty Interactive Corporation provides online travel services under the TripAdvisor and daodao.com brands.

Take a look at the 1-year chart of Liberty (Nasdaq: LINTA) with my added notations:

1-year chart of Liberty (Nasdaq: LINTA)

LINTA has been trading mostly sideways for the last 5 months. Over that period of time the stock has formed a clear resistance level at $30 (red). In addition, the stock has also created a strong level of support at $28 (blue). At some point the stock will have to break one of the two levels that the sideways consolidation has created.

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The Tale of the Tape: LINTA has clear levels of support ($28) and resistance ($30). The possible long positions on the stock would be either on a pullback to $28, or on a breakout above $30. The ideal short opportunity would be on a break below $28.

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