Shares of fireeye Inc (Nasdaq:flip side) has risen well last week, so much so that they closed the week at levels last seen in late 2015. Through the lens of technical analysis of stocks is the formation of the main “base” which now seems to be ripe for a rally. Traders and active investors could take advantage of the stock collapsing on the step above.
Source: David via Flickr (modified)
Personally, I still like shares of Internet security as the theme, through the intermediate and long-term lens given the increasing demand for its products. However, not all stocks in this niche can Shine, some can also become acquisition targets and, thus, benefit shareholders.
Through the lens of technical analysis the below analysis of the flip side of the campaign is a classic case where multi-timeframe analysis will be useful for vision, as well as narrowing in a particular reward to risk trade setup.
Flip side, stock charts
Click to enlarge
Moving averages legend: red – 200 a week, blue – 100 a week, yellow – 50 a week
Since the multi-year weekly chart, we see that since the shares were achieve tiring the downside momentum in late 2015 and early 2016, this greatly tottered sideways in a range. Please note that until the end of 2016 and first quarter 2017 stock tried to continue to break, but just didn’t have the strength to do that anymore.
Until the end of April 2017, the flip side of the stock has shown strength as the stock opened with a gap up and rallied after the earnings report. Then shares slipped in the positive area for the remainder of the year.
Last week, stocks finally managed to overcome 2016 and 2017 highs on a weekly closing basis, and it makes me sit up and take notice.
Click to enlarge
Moving averages legend: red – 200 day, blue – 100 day, yellow – 50 days
On the daily chart we can see last week’s 8% is even better. Note that at the end of March flip side, the stock found support at the yellow 50-day simple moving average. 4 APR stocks staged a classic buy signal as per my Indicator pivot B2.
By mid-week last week, the stock has pushed the bull flag pattern (black Parallels) and eventually closed the week above specified rules of the trading range, I.e above the blue stripe.
Hence, although I do not expect stock to rise in a parabolic fashion, the next upside target will be the $20 area and ultimately were able to see in the mid – $ 20s. Risks always increase through earnings reports, which is to say that some swing trades on the long side, it would be wise to be cropped to Size through the next earnings report in may.
There are a few different strategies, to use the current settings to the flip side, stocks and generate income. On Tuesday I will discuss my favorite of this strategy in a special webinar for InvestorPlace readers; using the Implied volatility of permanent income. Sign up here.
Check Serge Daily market review for 16 April.
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