Fortinet Inc. (FTNT) is poised to make a significant upside breakout. Prices have been in a consolidation pattern since February. As this pattern has evolved the daily On-Balance-Volume (OBV) has been rising, which tells us that buyers have been more active than sellers -- a bullish setup for further gains. Now that I have your attention, let's look further at the charts and indicators.
In this daily bar chart of FTNT, below, we can see the bullish golden cross of the 50-day simple moving average line and the 200-day simple moving average line in late February/early March. The 200-day line got tested in late September and early October but prices are now above both rising moving averages.
The pattern of volume is hard to read, above, but the On-Balance-Volume (OBV) has been rising. The OBV line looks like it is close to a new high, which could foreshadow a new price high. Look down at the 12-day momentum study in the lower panel -- there is a low in August and a higher low in late September and when compared to the price action showing equal lows in the same timeframe we have a bullish divergence.
In this weekly bar chart of FTNT, below, going back three years, we can see that prices are above the rising 40-week moving average line. The weekly OBV line shows a sideways basing pattern since December. The weekly Moving Average Convergence Divergence (MACD) oscillator is turning up for a fresh outright go long signal.
In this Point and Figure chart of FTNT, below, we can see the sideways consolidation pattern. A trade at $41.81 will be an upside breakout and allow for a $48.58 price target for starters.
Bottom line: 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.
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