Tickers discussed: PANW
The post discusses a bullish swing trade idea on Palo Alto Networks. Key levels and trading locations for the indexes are provided, along with trading plans and timely commentary to keep you on the right side of the trade.
$PANW in Focus
Cyber security and network company Palo Alto has come all the way back from the March lows and now finds itself in the low end of the prior value range just above $197.50. Now price has entered a massive $30 overhead gap. Still work to do grinding higher but at this point the set up looks promising with a huge reward if it works. Going forward a lot will depend on the continued positive price action in the broad market.
The way I prefer to play this is to give up a couple bucks and make price prove it can take out it’s 200 ema at $207. If it can do that I am a buyer with a tight stop below below the 200ema. Those with more risk tolerance could set a stop just below the gap at $202 or so. If price loses $200 any longs should be out. Looking overhead, the target is a gap fill to $235. Price may encounter some resistance at $215, but above that I think price will close the gap. If we get that move, take full profits and exit.
Summary
- Get long on a move above the 200ema near $207.
- Set a stop near $205 or if your risk tolerance permits at $202 / $201
- Definitely be out if price loses the gap.
- The target is a full gap fill at $235. Some traders may want to take 1/2 off at $215, especially if resistance is seen at this level.
- Earnings are already out so that worry is behind us.
- If the trigger hits, buy yourself some time if using options. I’d go out to at least June.
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