Nutanix Inc (NASDAQ: NTNX)

Nutanix, Inc., together with its subsidiaries, develops and provides an enterprise cloud platform in North America, Europe, the Asia Pacific, the Middle East, Latin America, and Africa. Its solution addresses a range of workloads, including enterprise applications, databases, virtual desktop infrastructure, unified communications, and big data analytics.

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

1-year chart of Nutanix (NASDAQ: NTNX)

NTNX seemed as if it had bottomed out at the end of 2018 after rallying off of a clear level of support at $35 (red). However, last week the stock broke down below that key support, which also sent NTNX to a new 52-week low. If the stock rallies, traders could expect $35 to now act as resistance.

The Tale of the Tape: NTNX has broken a key support level of $35, which was also a 52-week low breakdown. This should signal even lower prices ahead for the stock. A short trade could be entered on NTNX on a rally back up to $35, with a stop set above that level. A break back above $35 would negate the forecast for a move lower and a long position could be considered 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