Cloud-based cybersecurity firm Qualys Inc. (QLYS) may not be the most well-known name in the space, but it has an interesting chart pattern.
Let's check the charts and indicators for a strategy even as the stock receives a sell-side downgrade.
In the daily bar chart of QLYS, below, I can see a bottoming pattern evolving from November. The shares have traded sideways with buying interest appearing around $105-$100 and selling resistance in the $130 area. A strong move higher above $130 accompanied by strong volume will be a bullish breakout. The shares are trading above the 50-day and the 200-day moving average line.
The On-Balance-Volume (OBV) line shows strength from early May. The Moving Average Convergence Divergence (MACD) is bullsh.
In the weekly Japanese candlestick chart of QLYS, below, I can see that the shares made a low in January and a higher low in late April. The stock trades above the declining 40-week moving average line.
The weekly OBV line has been trying to move higher since early January. The MACD oscillator is crossing the zero line for an outright buy signal.
In this daily Point and Figure chart of QLYS, below, I can see a price target in the $181 area.
In this weekly Point and Figure chart of QLYS, below, I can see the same price target as the daily chart -- $181.
Bottom-line strategy: Traders could go long QLYS at current levels risking to $125. The $181 area is my price target.
