On Tuesday Morgan Stanley lowered their fundamental rating of F5 Networks ( FFIV) from "buy" to "hold". Let's check out the charts of this top supplier of application delivery controllers.
In this daily bar chart of FFIV, below, we can see price weakness in January to early March. A bounce in the back half of March and into April is fizzling out and prices are turning lower again. FFIV is back below the 200-day moving average line and testing the 50-day line.
The On-Balance-Volume (OBV) line has been weak since early November as traders have been more aggressive sellers. The Moving Average Convergence Divergence (MACD) oscillator moved above the zero line in late March but is crossing to the downside again.
In this weekly Japanese candlestick chart of FFIV, below, we can see a weakening picture. Prices crossed below the 40-week moving average line in late January and on the rally back to the line from below we can see two upper shadows as traders rejected the highs at the end of March and first week of April.
The On-Balance-Volume (OBV) line turned lower in January and the Moving Average Convergence Divergence (MACD) oscillator is below the zero line but has narrowed towards a possible cover shorts buy signal.
In this daily Point and Figure chart of FFIV, below, we can see a downside price target of $192.
In this weekly Point and Figure chart of FFIV, below, we can see a potential upside price target of $269 but a trade at $187.76 or lower should weaken the picture.
Bottom line strategy: Traders should avoid the long side of FFIV for now.
