Mitek Systems, Inc. (NASDAQ: MITK)

Mitek Systems, Inc. develops, markets, and sells mobile capture and identity verification software solutions for enterprise customers in the Unites States. The company’s products allow users to verify the identity, remotely deposit checks, pay bills, transfer credit card balances, open accounts, and get insurance quotes by taking pictures of documents with the camera-equipped smartphones and tablets.

Take a look at the 1-year chart of Mitek (NASDAQ: MITK) below with my added notations:

1-year chart of Mitek (NASDAQ: MITK)

Over the past 3 months, MITK has hit the $8.50 mark as resistance on a two different occasions. In addition, the stock has been climbing a trend line of support (green) since the end of June. Together, these two lines have formed an ascending triangle on MITK. Eventually, the stock will have to break either the $8.50 resistance or the triangle support.


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The Tale of the Tape:: MITK is winding up between two key levels. A long trade could be made at the triangle support or on a break above $8.50. A break below the trendline would be an opportunity to enter a short trade.

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!

Good luck!

Christian Tharp, CMT

Follow me on Twitter: @cmtstockcoach