Fortinet (FTNT) has made a "fits and starts" recovery from a February 2016 low, but it looks like a period of sideways-to-lower prices lie ahead for this cybersecurity company.
In this daily chart of FTNT, above, we see that prices are above the rising, 50-day simple moving average line. Prices in FTNT, a Growth Seeker portfolio holding, are also above the 200-day average, and it is just now transitioning from down to sideways. The aftermath of the golden cross of the 50-day and 200-day averages in June has been underwhelming.
The On-Balance-Volume (OBV) line has only made a slight increase from its February nadir. Low volume and a disappointing OBV line tell us that the rally this year is not on a firm footing. Prices have gone up, but new longs have not been attracted.
In this three-year weekly chart of FTNT, above, we can see that it took the stock about two years to reach the $50 mark -- and only about six months to decline back to around $25. Prices have recovered to trade above the 40-week moving average line, but the average line has only just turned flat from down.
The weekly OBV line peaked in 2015. The Moving Average Convergence Divergence (MACD) oscillator is in a bullish position above the zero line. Unless FTNT can rally and close above $38 -- a new high close for the move up -- we are likely to see prices slowly decline back towards support around $30.