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On the Earnings Front - CTCT | The Mesh Report

On the Earnings Front – CTCT

Christian Tharp, CMT October 28, 2011 0

Constant Contact, Inc. is a provider of on-demand e-mail marketing, social media marketing, event marketing and online survey solutions for small organizations, including small businesses, associations and non-profits. The company’s e-mail marketing product allows customers to create, send and track e-mail marketing campaigns. Its social media marketing features allow customers to manage and optimize their presence across multiple social media networks. The Company’s event marketing product enables customers to promote and manage events, track event registrations and collect online payments. Its online survey product enables customers to create and send surveys and analyze the responses.

Constant Contact Inc. released its quarterly earnings report before the bell today and they do not appeared to be received well. However, that can change once the market opens and it also doesn’t mean that there won’t be potential trading opportunities on the stock regardless.

Before discussing potential trading opportunities, please take a look at the 1-year chart of CTCT (Constant Contact, Inc.) below with my added notations:

There are (3) basic levels to watch on CTCT. The $20 (maroon) level was a key area of resistance when the stock was below it, so it should be an area of support on a pullback. If the stock shoots higher, the level at $22.50 (red) would be worth watching. If CTCT cannot hold $20, traders would probably expect the stock to move lower, possibly back to the $16 (blue) level.

 

The Tale of the Tape: CTCT released its quarterly earnings report before the bell today and there are several prices to watch. If CTCT looks to hold $20, a long trade could be entered. If the stock drops precipitously, a long trade could then be considered at the $16 level. Before that could happen, the stock would have to have broken the $20 level, thus a short trade could be placed.

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



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