CommVault Systems, Inc. (NASDAQ: CVLT)

CommVault Systems, Inc. provides data and information management software applications and related services primarily in North America, Europe, Australia, and Asia. The company develops, markets, and sells a suite of software applications and services under the Simpana brand. Its Simpana software suite includes solution for the backup and restoration of enterprise data for file systems, applications, databases, and virtual machine systems; integrated data archiving solution that optimizes data tiering and improves information governance; and enterprise-wide storage optimization for email and files reducing space on primary storage. The company also provides solutions for protection of critical applications and data with snapshots and real-time replication; Web browser that allows search, sort, select, and retrieval of corporate files and information from online, archive, and backup data copies; and Robust, which allows centralized management and reporting on operations across multiple environments.

Take a look at the 1-year chart of CommVault (NYSE: CVLT) with the added notations:

1-year chart of CommVault (NYSE: CVLT)

After selling of consistently into April, CVLT has held a very important level of support at $45 (green) for most of the following 5 months. No matter what the market has done during that time, CVLT has always found support at that level when tested. Now, the stock has approached $45 again and that could provide another bounce higher.

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The Tale of the Tape: CVLT has a key level of support at $45. A trader could enter a long position at $45 with a stop placed under the level. If the stock were to break below the support a short position could be entered instead.

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