Veeva Systems Inc. provides industry-specific cloud-based software solutions for the life sciences industry in North America, Europe, the Asia Pacific, and Latin America. The company’s solutions enable pharmaceutical and other life sciences companies to realize the benefits of cloud-based architectures and mobile applications for various business functions.
Take a look at the 1-year chart of Veeva (NYSE: VEEV) below with added notations:
VEEV has formed a trend line of support (blue) since its May bottom. Always remember that any (2) points can start a trend line, but it’s the 3rd test and beyond that confirm its relevance. VEEV has tested its trendline support 3 or 4 different times.
Also, the stock also has a regular level of support and resistance at $25 (purple) that sits just below the trendline.
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The Tale of the Tape: VEEV has a trendline support and a slightly lower $25 support. A long position could be entered on a pullback down to the trendline or lower at the $25 support level. A short position could be entered if VEEV were to break below the $25 support.
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