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Christian Tharp, CMT

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Five Star Stock Watch: VeriFone Systems

VeriFone Systems (NYSE: PAY) designs, markets and services electronic payment solutions worldwide.

It provides countertop electronic payment systems that accept magnetic, smart card, contactless or radio frequency identification cards and near field communication (NFC) payment options, as well as support credit, debit, check, EBT, and pre-paid products; an array of software applications and application libraries; and mobile solutions that support CDMA, GPRS, Bluetooth, and WiFi technologies.

The company also offers products for consumer-facing functionality at the point of sale; contactless/NFC payment solutions consisting of contactless readers, for consumer-facing transactions for indoor and outdoor payment system solutions, and integrated electronic payment systems that combine electronic payment processing, fuel dispensing, and ECR functions, as well as payment systems for integration. 

Take a look at this one-year chart for Verifone Systems, with added notations:

 

PAY has consistently hit resistance at $24 (red on the chart) during the last six months. In addition, the stock has formed a clear trendline of support (blue) starting back in June. The resistance has been tested on a dozen different days and the support has been tested on nine different occasions. At some point, the stock has to break through one of those two levels.

Verifone is set to release quarterly earnings on December ninth.

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!

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