Fortinet ( FTNT) develops and sells various cybersecurity solutions such as physical firewalls and antivirus software. Shares of the company were upgraded Tuesday to a "buy" from "hold" by a sell-side firm.
In our last look at FTNT on March 25 we had a mixed set of charts. Let's check out the charts again in light of this fundamental upgrade.
In the daily bar chart of FTNT, below, we can see that the shares made a lower low in early May but two bullish divergences have emerged. Prices made a higher low in June and have rallied above the 50-day moving average line and are currently just slightly below the 200-day line.
The On-Balance-Volume (OBV) line has been steady since December and did not make a new low in May with prices for a bullish divergence. The OBV line is close to making its own new high to lead the price action.
The trend-following Moving Average Convergence Divergence (MACD) oscillator made an equal low compared to late January even though prices made a lower low. Now the MACD oscillator is close to crossing above the zero line for an outright buy signal.
In the weekly Japanese candlestick chart of FTNT, below, we can see lower shadows in May and June telling us that traders are rejecting the lows. Prices are not far below the 40-week moving average line.
The weekly OBV line has remained very steady all year. The MACD oscillator is close to a cover shorts buy signal.
In this daily Point and Figure chart of FTNT, below, we can see a potential upside price target in the $65 area.
e In this weekly Point and Figure chart of FTNT, below, we can see a potential downside price target of $43 but a trade at $62.88 should improve the picture.
Bottom-line strategy: Traders could probe the long side of FTNT at current levels risking to $52. The $65 to $70 area is our price target for now.
