NetEase Inc (NASDAQ: NTES)

NetEase, Inc. engages in the provision of online internet technology services. It operates through the following business segments: Online Games, E-commerce, Advertisign Services, and E-Mail and Others.

Take a look at the 1-year chart of NetEase (NASDAQ: NTES) below with the added notations:

Over the course of the past 3 months, NTES has formed an important level to watch at the $320 (blue) mark. That level was resistance back in December, then support in July, and now the stock has tested it as resistance multiple times over the past few days.

The Tale of the Tape: NTES has a key level at $320. A trader could enter a long position on a break above that level with a stop placed under it. However, if traders are bearish on the stock, a short trade could be made instead on a rally up to the $320 mark.

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