is a small-cap firm providing integrated information management solutions and services for local governments in the United States, Canada, Puerto Rico, and the United Kingdom. Its software applications include financial, tax, and law enforcement. The charts are impressive as are the company's financials.
On the long-term time frame, what we see is an October break higher that overtook the July 2008 highs. It did that on a little less than 5 million shares on a monthly basis compared with 5.7 million shares registered at those highs.
As we know, such a break is bullish, but it is
. Suspect breaks higher usually get retested. Sometimes that happens reasonably soon, and in other cases, prices can extend for a long time before the retrace to retest and regenerate occurs.
In the case of Tyler, that retest is already underway. The July 2008 high was $18.47. In just the past week, Tyler traded back to $18.48, missing the retest by a single penny. Does a penny make a difference? Like everything in trading, there are no absolutes, but as an investor, your odds increase when the test is complete. That way you know it is has happened.
Given that the test almost happened, how can we gather confidence that we are either going higher or lower from here? The best way to do that is to look at the other time frames. Here's the intermediate-term time frame chart.
You can see that it also shows a suspect bullish trend. The test on this time frame would come in at $17.76.
On the short-term time frame, we also see another suspect bullish pattern with the test on this time frame coming in at $17.80.
One of the reasons you always look across all three time frames is to gain insight into other possible tests that may be needed. On the weekly and daily charts, there are needed retests just like the monthly chart. Given that the short- and intermediate-term time frames are calling for retests as well, the evidence in front of us suggests that we may in fact see prices come back in a bit more before this period of consolidation is over. That information the market gives to you -- if you pay attention.
TYL has great promise going forward. If you are not already in the equity, or even if you are, you want to be on watch for another possible entry point that looks to be just around the corner.
So be sure to set your alarm for this one, and until next time, keep trading the charts!
At the time of publication, Little was long Tyler.
L.A. Little is an author, professional trader and money manager who writes daily on
, a free educational site for traders and investors. He has been featured in Stocks & Commodities magazine and is the author of