F5 Networks Could Sink Further Into the Technical Abyss

Let's check out the charts to see how far FFIV may fall.

F5 Networks, Inc. (FFIV) , which engages in the "development and provision of software defined application services," was downgraded to "neutral" by two sell-side firms Thursday -- the definition of a bad fundamental day.

Let's check out the charts to see how far FFIV may fall.  

In this daily bar chart of FFIV, below, we can see a bumpy decline from late December. Prices gapped lower in late January and again in late April. Prices made fresh new lows in May, June and also in July. FFIV trades below the declining 50-day moving average line and below the bearish 200-day line.

The On-Balance-Volume (OBV) line has been weak since November as traders of FFIV have been more aggressive sellers of the stock. The Moving Average Convergence Divergence (MACD) oscillator is below the zero line and crossing to the downside for a new sell signal. 

 

In this weekly Japanese candlestick chart of FFIV, below, we do not find any bottom-reversal patterns to suggest we are seeing a price low. FFIV trades below the declining 40-week moving average line.

 

The weekly OBV line is pointed down and the MACD oscillator is bearish but showing some narrowing in recent weeks. 

 

 

 

In this daily Point and Figure chart of FFIV, below, we can see a downside price target in the $134 area.

 

 

 

 

In this second Point and Figure chart of FFIV, below, we used weekly price data. Here the software suggests a downside price target in the $88 area. 

 

 

 

Bottom-line strategy: We were bearish on FFIV in our April 12 review. Continue to avoid the long side of FFIV.

 

Employees of TheStreet are prohibited from trading individual securities.