Palo Alto Networks (PANW) Post-Earnings Analysis

Here is a Palo Alto Networks (PANW) Post-Earnings Analysis. This update includes a couple of charts to analyze and think about after Palo Alto Networks (PANW) reported their earnings and their sliced through the $140 support area that I mentioned to watch for.

Palo Alto Networks (PANW)

After noticing PANW’s huge gap-down yesterday morning, I posted an updated chart on the 2 lower support areas to watch as potential bottoming and rebound areas. Here is another copy of the chart.

Analyzing Lower Support Areas for Palo Alto Networks (PANW) Based on its Earnings Drop

At first glance, those are the 2 support areas I see. Let’s see if either of those support areas can be confirmed using some Fibonacci charting tools.

PANW

This is a 3 year daily candlestick chart. I’ve placed a Fibonacci Retracement Tool on the entire uptrend. The 61.8% Target Line seems to have provided support twice before. The question is though, will it support it this time.

Analyzing Post-Earnings Share Price Activity for Palo Alto Networks (PANW) Using a Fibonacci Retracement & Extension Tool

The Fibonacci Extension Tool seems to confirm the 61.8% Target Line as initial support. However, if the support around $115 is broken, the $90 price target comes into play. The $90 price target is calculated by the 161.8% Target Line from the Fibonacci Extension Tool. The 161.8% Target Line also seems to confirm the support area I identified above with the green trendline.

Palo Alto Networks (PANW) – Summary

When a stock’s share price does not move as anticipated, it is important to re-analyze the chart set-up before proceeding. For PANW, dropping through the $140 support area and below the beginning of its uptrend in January means it is correcting something larger still.

The first indication for a possible reversal is to monitor the MACD Histogram on its daily chart. When it starts to show a slow-down in selling momentum, calculate which support area it is closer to at that time. If it is near one of the support areas when this happens, a scale-in purchase could be made for trading purposes.

After PANW’s share price does finally stat to rebound, a Fibonacci Retracement Tool can be placed on its recent drop and a 38.2% Retracement can be calculated. This would be the minimum amount of the bounce I would anticipate before a possible re-test of the bottom area it sets, whenever that may be.