Fortinet Stock Is Near a Very Important Breakout Level

 | Jan 22, 2018 | 4:00 PM EST
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We have been positive on Fortinet Inc. (FTNT) for a while, and it is even closer to an important upside breakout. In November we wrote, "Traders and investors could go long FTNT here and on strength above $41.81 looking for gains to the $49-$50 area. Risk below $38 or below the 200-day moving average line." FTNT has not yet reached our $49-$50 price target but things look pretty bullish and another look at the charts is a good idea.

In this daily bar chart of FTNT, below, we can see that prices are above the rising 50-day moving average line as well as the bullish 200-day line. The daily On-Balance-Volume (OBV) line has generally followed prices higher and is constructive. The Moving Average Convergence Divergence (MACD) oscillator has been above the zero line since early October and appears to be turning up again for a fresh outright buy signal.

In this weekly bar chart of FTNT, below, we can see that prices are above the rising 40-week moving average line. The highs of 2015 are not far away and do not represent significant resistance as prices where only above $46 for around four weeks. The weekly OBV line has broken out above its 2017 high and is another plus for the rally to continue. The weekly MACD oscillator has been above the zero line since February and is currently in a bullish mode.

In this Point and Figure chart of FTNT, below, we can see that prices are getting close to a breakout at $51, which could open the way to a longer-term advance to $65.00.

Bottom line: The bulls look to be in control of FTNT and aggressive traders could add to longs here. Risk a close below $41 now and look for gains to the $65 area in the months ahead.

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