Autodesk, Inc. (NASDAQ: ADSK)

Autodesk, Inc. operates as a design software and services company worldwide.

Take a look at the 1-year chart of Autodesk, Inc. (NASDAQ: ADSK) below with my added notations:

1-year chart of Autodesk, Inc. (NASDAQ: ADSK)

ADSK has formed an up-channel over the past two months. A channel is formed through the combination of a trend line support that runs parallel to a trend line resistance. ADSK recently hit the topside of the channel and could be primed for a drop lower. However, a break through channel resistance should lead to higher prices, overall.

The Tale of the Tape: ADSK has formed a common pattern know as a channel. A long opportunity could be entered on a pullback to the channel support, which at this point seems to be around $165, or on a break through channel resistance. Short trades could be entered at channel resistance OR if ADSK were to break below the channel support.

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