Take a look at the 1-year chart of VASCO (Nasdaq: VDSI) with the added notations:
VDSI rallied nicely from April until its November peak. Since then, the stock has traded sideways to lower. During this sideways period, the stock has been finding repeated support at $21 (blue). Now that the stock is there again, traders should be able to expect some sort of bounce. However, if the $21 support were to break, much lower prices should follow.
The Tale of the Tape: VDSI has a key level of support at $21. A trader could enter a long position at $21 with a stop placed under the level. If the stock were to break below the support a short position could be entered instead.
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