Shares of Palo Alto Networks (PANW) were rated a new buy by a smaller sell-side firm Thursday. Sometimes the sharpest minds work at smaller shops so let's check out the charts of this cybersecurity platform.
In the daily bar chart of PANW, below, we can see that the shares have been testing the 200-day moving average line and its slope is flat or neutral. We can see that prior tests of this indicator since early October have failed. Is this time the charm?
The slope of the 50-day moving average line is bottoming. Trading volume has increased in November as traders are showing more interest in the company. The On-Balance-Volume (OBV) line shows some uneven improvement in November.
The trend-following Moving Average Convergence Divergence (MACD) oscillator crossed above the zero line last month for an outright buy signal.
In the weekly Japanese candlestick chart of PANW, below, we are a little confused (this happens at times). The shares are not showing a clear picture of a bottom reversal and no obvious lower shadows. Prices are testing the downward sloping 40-week moving average line.
The weekly OBV line shows some improvement in the past two weeks. The weekly MACD oscillator is crossing to the upside for a cover shorts buy signal.
In this daily Point and Figure chart of PANW, below, we can see a potential downside price target in the $153 area.
In this weekly Point and Figure chart of PANW, below, we can see a lower price target in the $133 area.
Bottom-line strategy: In the short-run it looks like shares of PANW can rally towards the $190 area but I am not sure that this strength can be sustained. Nimble traders only could jump in for a short-term turn.
Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.
