Youku Tudou Inc. operates as an Internet television company in the People’s Republic of China. Its Internet television platform enables consumers to search, view, and share video content across various devices. The company’s services for users comprise online video content library consisting primarily of professionally produced content, including television serial dramas, movies, current event reports, variety shows, and music videos. It also provides guided user-generated content through Youku Paike and Youku Niuren programs; and produces a range of content, such as sponsored Web serial dramas, reality shows, interviews, and variety shows under Youku Originals brand.
Take a look at the 1-year chart of Youku (NYSE: YOKU) with the added notations:
YOKU seems to be trying to bottom out over the last 6 months while finding support at $16 (red) each time that level has been approached. Now that the stock is almost there again, traders should be able to expect some sort of bounce. However, if the $16 support were to break, much lower prices should follow.
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The Tale of the Tape: YOKU has a key level of support at $16. A trader could enter a long position at $16 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!
Christian Tharp, CMT
Follow me on Twitter: @cmtstockcoach