VMware, Inc. provides virtualization and cloud infrastructure solutions in the United States and internationally. Its virtualization infrastructure solutions includes a suite of products and services designed to deliver a software-defined data center(SDDC), run on industry-standard desktop computers, servers, and mobile devices; and supports a range of operating system and application environments, as well as networking and storage infrastructures.
Take a look at the 1-year chart of VM (NYSE: VMW) below with added notations:
VMW has been swinging around for the past 5-6 months. During that time, the stock had created a key resistance level at $98 (blue), which was also VMW’s 52-week high resistance barrier. The stock finally broke above that level yesterday, and should now be moving overall higher.
The Tale of the Tape: VMW broke its 52-week resistance at $98. The possible long position on the stock would be on a pullback down to that level with a stop placed under it. A break back below $98 could negate the forecast for a move higher.
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