Rapid7 Inc (NASDAQ: RPD)

Rapid7, Inc. provides analytics solutions for security and information (IT) operations. Its vulnerability management solutions include InsightVM and Nexpose, InsightAppSec, AppSpider and Metasploit. The company’s incident detection and response solutions comprise InsightIDR and Managed Detection and Response.

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

After bottoming out during the 2nd half of 2018, RPD has rallied to a point where it has now created a key level of resistance at $55 (red). The stock has recently tested, and pulled back from, that level again, but a break through $55 should lead to another leg higher for PRD.

The Tale of the Tape: RPD has a key level of resistance at $55. A long trade could be made on a break above that mark with a stop set under it. Bearish trades could be made on rallies up to $55.

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