K12 Inc. (NYSE: LRN)

K12, Inc. is a technology-based educational company, which offers proprietary and third party curriculum, software systems and educational services. It also offers online curriculum and career services to middle and high school students, under the Destinations Career Academy brand name.

Take a look at the 1-year chart of K12 Inc. (NYSE: LRN) with the added notations:

1-year chart of K12 Inc. (NYSE: LRN)

LRN has formed an important level of support at $16 (green) over the past couple of months. Although there have been some wild swings as of late, the stock has fallen back down to that support again. If the $16 level were to break, lower prices should follow for LRN.

The Tale of the Tape: LRN has key support at $16. A trader could enter a long position at or around $16 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