Infoblox Inc. develops, markets, and sells automated network control solutions worldwide. Its appliance-based solution combines real-time IP address management with the automation of network control, and network change and configuration management processes in physical and virtual appliances. Infoblox Inc. sells its solution through distributors, integrators, managed service providers, and value-added resellers, as well as a field sales force.
Take a look at the 1-year chart of Infoblox (NYSE: BLOX) with the added notations:
BLOX peaked back in January at $39 and lost over 70 percent of its value from there. The stock seems to have bottomed out over the last 5 months, and over the last two the stock has commonly hit a very important level of resistance at $15 (red). If the stock can break above $15 higher prices should follow, most likely a run back to the $17.50 level (blue).
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The Tale of the Tape: BLOX has a key level of resistance at $15. A long trade could be entered on a break through that level. However, if you are bearish on the stock, a short trade could be made on any rallies up to $15.
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!
Christian Tharp, CMT
Follow me on Twitter: @cmtstockcoach