Name: Check Point (Nasdaq: CHKP)
Last price: $14.98, on June 19
Support to watch: Around the most recent closing price
Resistance to watch: $17
Chart courtesy of Stockcharts.com
The last time I analyzed Check Point was on March 20 this year, when the price stood at $30. Although the price seemed low, I wrote that there was no reason to hurry to buy the share.
The share is now at about $15, half the March 20 price. I’m re-evaluating the share now, not because it sank 50%, but because this time, around $15, buying can be realistically considered.
The reason is the evident signs of support in this region, together with indications that people are accumulating the share at $15.
Support for Check Point at $15 has continued for two months. Every time the share touched $15, buyers made sure it remained above the support level. The high volume of trade on those days shows that this support is strong.
Does that necessarily mean that the share will begin to rise, and not fall? Of course not. However, in contrast to the previous occasion at $30, (remember that although $30 now appears high, it was low at the time, just as $15 appears low now), this time the forces are evenly balanced, or even slightly inclined upwards.
This means that buying can be tried in the $15 region, hedged with a sell order at a reasonable margin below it.
If the share falls substantially below $15 (below $14, for example), the sell order will be exercised, and we’ll know that Check Point’s slide can be expected to continue (see you at $7.50?). If the share does attempt to rise, it will test the resistance at $17. A move above $17 and support above that level will signal chances for further rises.
The above recommendations were made by a person/s working in the investment industry, who may hold positions in securities mentioned in the column. This column should not be taken as advice to buy, sell or continue to hold any securities, and anyone acting on the advice of this column does so at his or her own risk.
This review was written before the opening of Thursday trading in New York.
Published by Globes [online] - www.globes.co.il - on June 20, 2002