Trade of the Day: VMware, Inc. Is Well Positioned for 2018

VMW stock is a bull's bull

By Serge Berger, InvestorPlace Contributor

Editor’s Note: Beat the Bell and the  Daily Trader’s Alert will return after the new year, on Jan. 2.

Shares of virtualization software solutions company VMware, Inc. (NYSE:VMW) rallied about 61% in 2017. From both a trend-following perspective as well as a bigger-picture technical view, VMW stock also sets up to be a big winner in 2018.

VMW Stock: VMware, Inc. Is Well Positioned for 2018
Source: Shutterstock

As I often highlight to my subscriber clients, I believe we currently live in a revolutionary technology products and services period that rivals any other revolutionary period for mankind. While I obviously have not lived through, say, the industrial revolution and thus am not in a position to make that call empirically, given the technological advances over just the past few years most people would arguably be hard pressed not to be impressed with fast-paced changes in technology.

VMware with its products and services to me is one of the companies right in the middle of this rapid advance in technology products and services.

VMW Stock Charts

Click to Enlarge

Moving averages legend: red – 200 week, blue – 100 week, yellow – 50 week

On the multiyear weekly chart, we see that over the years, VMW stock has routinely struggled to overcome a well-defined horizontal resistance line around the $115 mark.

After consolidating below this area again in September, October brought about a long-overdue breakout above this area. Following a re-test of this area in early December a next leg higher started underway.

From this big-picture angle, VMW should now be well positioned into 2018 and toward a $150 price target for the time being.


Click to Enlarge

Moving averages legend: red – 200 day, blue – 100 day, yellow – 50 day

On the daily chart, we see that VMW stock advanced in a well-defined up-trending manner since early 2016. The slope of this advance however began to steepen in the second half of 2017 and ultimately the stock overshot to the upside this past November. The stock then once again consolidated and although still trading above the upper end of the range continues to look attractive even in the near-term.

From here, active investors and traders could look to put on long-side trades should the stock break above the $129.50 area for a next upside target closer to $140. All along market participants should keep in mind the bigger picture bullish posturing of VMW stock as per the first chart above.

Check out Anthony Mirhaydari’s Daily Market Outlook for Dec. 28.

Tell us what you think about this article! Drop us an email at [email protected], chat with us on Twitter at @InvestorPlace or comment on the post on Facebook. Read more about our comments policy here.

Take Serge’s quiz to find out which trading strategy best suits your personality.

Article printed from InvestorPlace Media,

©2018 InvestorPlace Media, LLC