CommVault Systems, Inc. (NASDAQ: CVLT)

Commvault Systems, Inc. provides data and information management software applications and related services in North America, Europe, Australia, and Asia. The company provides data protection-backup and recovery, cloud and infrastructure management, and retention and compliance software solutions. Its software platform features include data protection solutions to support operating systems, applications, and databases on virtual and physical servers, NAS shares, cloud-based infrastructures, and mobile devices; management through a single console; multiple protection methods, including backup and archive, snapshot management, replication, and content indexing for eDiscovery; storage management using deduplication for disk, tape, and cloud; and integration with the industry’s storage arrays.

Take a look at the 1-year chart of Commvault (NASDAQ: CVLT) with the added notations:

1-year chart of Commvault (NASDAQ: CVLT)

While trading mostly sideways during the past several months, CVLT has managed to bounce on top of the $50 support (green) several times. Now that the stock has fallen back down to that support area again, traders should be able to expect some sort of bounce. However, if the $50 support level breaks, lower prices should follow.

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The Tale of the Tape: CVLT has a key area of support at $50. A trader could enter a long position at $50 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!

Good luck!

Christian Tharp, CMT

Follow me on Twitter: @cmtstockcoach