Fortinet, Inc. (FTNT) was reviewed two months ago when I wrote, "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."
FTNT has reached $55 and not $65 but a fresh look at the charts and indicators is a good idea at this juncture in this volatile market environment.
In this updated daily bar chart of FTNT, below, we can see that prices are above the rising 50-day moving average line. FTNT may not be extended when compared to the 50-day average but it does look extended when compared to the rising 200-day average line. The pattern of volume looks heavier from October to early February but has diminished in recent weeks.
The daily On-Balance-Volume (OBV) line shows an uptrend from April to the middle of March. The OBV line has weakened in the past week and this could be the beginning of a longer decline as sellers have started to turn more aggressive.
The daily Moving Average Convergence Divergence (MACD) oscillator is crossing to the downside from above the zero line for a "take profits sell signal".
In this weekly chart of FTNT, below, we can see that prices are above the rising 40-week moving line and it looks like FTNT is at its widest distance above the line in the past three years.
The pattern of volume on this weekly chart does not show an increasing pattern the past year but the OBV line has risen since late September. Currently the OBV line shows a small decline suggesting that sellers of FTNT have started to become more aggressive. The 12-week momentum study in the lower panel shows that price momentum has stalled.
In this Point and Figure chart of FTNT, below, we can see that prices have reached and passed the projected price target of $48 but a pattern of distribution has not developed.
Bottom line: Are the charts of FTNT screaming "sell"? Not exactly but it looks like selling pressure has increased in this month with heavier volume being traded on days and weeks when FTNT has closed lower. Traders looking to preserve capital might consider booking some profits here and raising the sell-stops of the balance to $49 or just below minor nearby support.