Earnings Play: Palo Alto Networks

Upside breakout from a falling wedge pattern.

Charts (4)

On Monday, before market, Palo Alto Networks (PANW) is anticipated to release first quarter EPS of $1.33 compared to $1.05 a year ago on revenue of approximately $926.6 million vs. $771.9 million last year. The company is a global cybersecurity leader and on November 11th, the Co announced that it entered into a definitive agreement to acquire Expanse Inc, a leader in attack surface management, for roughly 800 million dollars. The deal is expected to close during Palo Alto's fiscal second quarter.  

Technically speaking, on a daily chart, Palo Alto's stock price appears to have broken out to the upside of a falling wedge pattern that began to form after price made a record high of 275.03 in mid to late-August. The RSI is showing bullish momentum and currently above 60. The simple moving averages (SMA) are currently mixed to positive, however if the 20-day SMA crosses above the 50-day SMA it would be a bullish signal. Palo Alto's stock price will likely continue advancing towards the all-time high of roughly 275.00. If price can breakout to the upside of 275.00, then its first Fibonacci target would be 316.00. If price can get above 316.00 it could potentially continue to run. If price falls below the upper trendline of the pattern the bias should remain bullish due to the extreme volatility of recent market conditions. Therefore, the 239.00 support level seems to be a more reasonable place for a possible bounce. However, if price falls below 239.00 it would be a negative signal that could send price back down to 219.00. If price does not rebound off of 219.00, then it could be the beginning of a new downtrend.        

Source: GAIN Capital, TradingView

More from Earnings

From time to time, GAIN Capital Australia Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.