Some thoughts on Palo Alto Networks (PANW). (October 11, 2018)
PANW
Palo Alto Networks ( NYSE: PANW ) is just one of like 90 charts that look just about the same. The slope might be a little bit different but basically this is at a point where it has returned to established support here. Resistance had been $200.00 then once it was broken through, this resistance here couldn’t get through, and then it has broken through and now it was support. Bounce, bounce, bounce, bounce and today, bounce.
With this latest sell-off here from 240.00, this is really your level of resistance right here. Right here, between 240.00 and where this is trading at 205.00, so this is really kind of a quick trade or at least quick chart analysis. You have to assume that there is going to be a lot of selling pressure here because folks got trapped in this chart. There is just not enough massive volume here to give you the sense that all the sellers have been washed out; I just don’t think they have. There has been an uptick in selling, of course, all across the board but this hasn’t been a real washout. It has just been a not quite orderly, but not gut wrenching sell-off down to $200.00.
I think today, the fact that the stock is actually up above yesterday’s close, that’s a real positive sign for Palo Alto( NYSE: PANW ). So you can make this trade right now; you can be buying this stock right here. Set a stop, give it about 4, 4.2 percent below the 200-day moving average. You could even, if you really wanted to be tight, you could disregard the 200-day moving average and say, No, I am going to put my stop at 199.00 because I think that this 200.00 level held. Not is going to hold but I think it held today; and if I am right the stock should continue to move up maybe to 210.00, maybe 220.00. I am not really looking for too much more than that because of the low ceiling. But if I am right that is what it should do.
Now, if I am not right then I don’t want to be long the stock. So how do I know that I’m not right? Well, the stock could fall below 200.00. Then that is when I know I am not right. So okay, I don’t want to be long the stock. And by the way, if I get stopped out, the stock falls down to the 200-day moving average and then rebounds, you know what? I can buy down here and actually have a lower cost basis than I did up here when I took my loss. So there are just a few different ways of looking at this trade but it all really comes down to this: The $200.00 level has once again, at least as I do this video right now, has once again held. If it does not hold then we are in a whole new world here.
So if you are trading this take a small position and really look for about 5 percent, that’s really all I would look for. This is a really, really dicey market, the last couple days in a row we have done live trading in the morning and it has just been a really, really brutal market. So it is okay to be on the sidelines, that’s really where I am for the most part. I have a very, very small amount of money in the market. When I say very, very small what I mean is very, very, very small, just enough to kind of keep my hand in it. So if you are protecting your money during times like this you are going to have more of it to use when there are really, really good opportunities ahead.
Free Chart