Hortonworks, Inc. focuses on the development, distribution, and support of Hadoop open source project in the United States and internationally. It offers Hortonworks Data Platform, an enterprise-grade data management platform that enables its customers to capture, store, process, and analyze increasing amounts of existing and new data types without the need to replace their existing data center infrastructure.
Take a look at the 1-year chart of Hortonworks (NASDAQ: HDP) with the added notations:
After declining into the beginning of 2016, HDP started bouncing on top of a clear $10 support (green) during the most recent 4 months. Now that the stock appears to be falling back down to that support level again, traders should be able to expect some sort of bounce. However, if the $10 support breaks, lower prices should follow.
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The Tale of the Tape: HDP has a key level of support at $10. A trader could enter a long position at $10 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