In another "Executive Decision" segment last night in the West Coast edition of Mad Money, Jim Cramer spoke with Kevin Mandia, CEO of cybersecurity company FireEye (FEYE) . FireEye has multiple ways to make money and the company's mission remains the same -- to respond to every attack that matters and do their best to detect, protect and prevent as many attacks as they can. I last looked in on FEYE in early June writing that " 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....The $27-$30 area is my price target for now." The chart of FEYE has improved in the past four weeks and prices look ready to launch into a rally.
In this daily bar chart of FEYE, below, we can see that prices have rallied from a mid-August nadir. FEYE is now back above the rising 200-day moving average line and the flat 50-day moving average. The daily On-Balance-Volume (OBV) line shows a much stronger pattern than prices do since February. FEYE declined from April to August but the OBV line really only decline in June and is now at a new high even though prices are well their April zenith. The trend-following Moving Average Convergence Divergence (MACD) oscillator is above the zero line in a bullish mode.
In this weekly bar chart of FEYE, below, we can see a 2.5-year base pattern for FEYE. Prices are above the rising 40-week moving average line. A weekly close above the April high should be an important upside breakout. The weekly OBV line is firm and very close to making a new high for the move up. The MACD oscillator is on the zero line and poised to give a buy signal when it turns higher.
In this first Point and Figure chart, below, an upside price target of $20.31 is being projected.
In this second Point and Figure chart, below, we can see that trades at $19.50 and $20 will be bullish and allow us to give higher price targets.
Bottom line strategy: One Point and Figure chart gives us a $20.31 price target so this should mean we break out of the large base formation. Aggressive traders should consider going long FEYE on strength above $17.50.