VASCO Data Security International, Inc., together with its subsidiaries, designs, develops, markets, and supports hardware and software security systems that manage and secure access to information assets worldwide. The company offers VACMAN Controller, a host system software authentication platform that combines technologies in one platform; IDENTIKEY Authentication Server that adds server functionality to the VACMAN core authentication platform; DIGIPASS as a Service, a cloud-based authentication service primarily for enterprise customers; and MYDIGIPASS solutions for end user authentication in the cloud.
Take a look at the 1-year chart of VASCO (Nasdaq: VDSI) with the added notations:
VDSI rallied nicely from April until its November peak. Since then, the stock has traded sideways to lower. During this sideways period, the stock has been finding repeated support at $21 (blue). Now that the stock is there again, traders should be able to expect some sort of bounce. However, if the $21 support were to break, much lower prices should follow.
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The Tale of the Tape: VDSI has a key level of support at $21. A trader could enter a long position at $21 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