Get Ready to Trade This Tech Stock If It Breaks Resistance

C3.ai, Inc. provides enterprise artificial intelligence (AI) software for digital transformation. It delivers the C3 AI suite for developing, deploying, and operating large-scale AI, predictive analytics, and Internet of Things (IoT) applications in addition to a portfolio of turn-key AI applications.

Take a look at the 1-year chart of C3 (NYSE: AI) below with the added notations:

Chart of AI provided by TradingView

AI has hit the $21.5 mark as resistance (yellow) on three separate occasions since mid-April. After pulling lower after the most recent test of $21.5, the stock appears to have turned higher again. A break above $21.5 could open the door to higher prices for AI.

The Tale of the Tape: AI has an important level of resistance at $21.5. A long trade could be entered on a break through that level, with a stop placed below it. However, if you are bearish on the stock, a short trade could be made on any rallies up to the $21.5 area.

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!

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Good luck!

— Christian Tharp

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