FireEye, Inc. (FEYE) is a relatively hard stock to trade in the short-run. It has quick rallies that are invigorating if you are long and then with almost no notice it corrects to the downside. If you look at a daily bar chart (first chart, below) you should be able to quickly grasp the problem. The weekly shows a different story especially when viewed on a "log basis."
Let's check out the charts and indicators because this name could have a big upside move eventually.
In this daily bar chart of FEYE, below, we can see the up and down swings in FEYE over the past 12 months. There are a couple of gaps. Two moving average crossovers and countless reversals. From early November the rally becomes "more durable" but the reactions can still shake out traders with close stops.
Currently FEYE is trading between the declining 50-day moving average line and the rising 200-day line.
The daily On-Balance-Volume (OBV) line made lows in November and February before firming. The rising OBV line is a bullish signal in that it tells us that buyers are being more aggressive.
The Moving Average Convergence Divergence (MACD) oscillator is below the zero line but narrowing towards a possible bullish cover shorts buy signal.
In this weekly bar chart of FEYE, below, the scaling is changing to log from arithmetic. The prices do not change but the shape of the chart is now more manageable in my opinion. Prices are above the rising 40-week moving average line.
The weekly OBV line has been in a sideways pattern since early 2016. The weekly MACD oscillator is hard to read but it is above the zero line in positive territory.
In this Point and Figure chart of FEYE, below, we can see a base pattern where trades at $19.50 and $20.00 will be bullish and open the way to a potential upside price target of $27.00 for starters.
Bottom line: While the $19.50 and $20 price points are key to a breakout on the upside, I think aggressive traders could probe the long side at current levels risking a close below $15.50. Moves above $19.50 and $20 could be used to add to positions. The $27-$30 area is my price target for now.
