This is a Palo Alto Networks (PANW) stock chart review. After slicing through its initial support area around the $140 price level, I wrote an article to review lower support areas. That article can be quickly accessed here “3/2/2017 – Palo Alto Networks (PANW) Post-Earnings Analysis“.

In that article, I identified 2 main support areas to watch during PANW’s earnings drop. Those 2 main support areas were located around the $112 and $89 price levels. Let’s see how PANW’s share price reacted around those support levels. Also, let’s see if we can confirm its current trend.

Palo Alto Networks (PANW) Stock Chart Review

Let’s start out the Palo Alto Networks (PANW) stock chart review with a 3 year weekly candlestick chart. PANW had a nasty earnings drop back in February 2017. Its share price did find support right around the secondary support area from the Doji candlestick pattern.

If you purchased any shares when PANW’s share price was around the $112 support level, congratulations on the buy!

PANW’s share price has now seen resistance at the $140 level during its attempted rebound. A break above the $140 price level on heavier than normal buying volume is needed to continue the uptrend towards its overhead resistance area. The overhead resistance area currently resides around the $160 price level.

The MACD Histogram for PANW on the above chart reflects an increase in buying momentum as compared to its previous rebound. That increase in buying momentum typically indicates[s2If !current_user_can(access_s2member_level1)]……

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I review support areas to consider scale-in purchases. Overhead price targets are also calculated. And most importantly, I discuss the downside risk for PANW’s share price.

If you are not a Trendy Stock Charts member, consider joining today! There are several different subscription plans available.[/s2If][s2If current_user_can(access_s2member_level1)] a change in the trend. If that is the case, PANW should find support between the $125 – $132 price level during any market or PANW pullback. A rebound from that price level should also have enough buying volume and momentum to push through the $140 support level that is now acting as resistance.

The overhead price target for any purchase made in the $125 – $132 price area is the $160 overhead resistance area.

PANW – Point & Figure

As mentioned in my article for Snapchat (SNAP) earlier today, sometimes the 2 styles of Point & Figure charts calculate vastly different price targets. That is the case for Palo Alto Networks (PANW). Its Closing P&F chart reflects a bearish price target of $87 while its High/Low P&F chart (intra-day) reflects a bullish price objective of $151.

High/Low P&F Chart

Closing P&F Chart

I like it better when the price objectives for both styles of P&F charts are similar, not opposite each other. Maybe the P&F Charts are indicating that the $151 area is the rebound price target before a longer possible correction towards the $87 price level starts?

A bullish $151 price target and a bearish $87 price target do not set up well from a risk to reward perspective. That does not mean it is not investable, but it does warrant caution and quick trading decisions to make sure you don’t get caught holding shares on a longer correction.

PANW – Moving Averages

This next chart is a 1 year daily candlestick chart. This chart will review PANW’s share price activity over the last year from a moving average perspective.

PANW has just recently regained control of its 200 Day moving average. Another Golden Cross pattern appears eminent. A continued rebound trade may be setting up for PANW.

A pullback that finds support around the 50 Day and 200 Day moving averages looks like the best opportunity to make a scale-in purchase. That is based solely from a moving average perspective. There was huge buying volume that helped PANW regain control of its 200 Day moving average. Maintaining control and staying above the 200 Day moving average is imperative for PANW’s medium and longer term.

The 50 Day moving average line helps to confirm the gray shaded box in the very first chart above. The gray shaded box represents the area to make a scale-in purchase of shares.

Be patient with this trade. The Shooting Star candlestick pattern that developed on July 13 may have indicated the top PANW’s current uptrend with a consolidation period beginning. A re-test of the $125ish area is very probable based on that candlestick.

Palo Alto Networks (PANW) Stock Chart Summary

With conflicting signals on the P&F charts, proceed with caution. Make sure PANW’s share price rebounds from the 50 & 200 Day moving average lines with buying volume that is above average. If so, then use that pullback around the $125 – $132 range as an opportunity to make a scale-in purchase if you haven’t made a purchase already.

The $160 price level is the preliminary overhead price target for any purchases previously made or that will be made in the near future. As PANW’s share price approaches its $160 price target, it would be best to re-analyze its uptrend at that point. Sometimes stocks give clues that higher prices could be coming. PANW’s charts should therefore be re-analyzed to determine if a continued uptrend looks probable or if it is time for a correction/consolidation period.

It is imperative that any pullback finds support at the 50 & 200 Day moving average lines. If another Golden Cross pattern develops in the near future, the probability of PANW finding support around the 50 and 200 Day moving averages increases significantly.

PANW has increasing buying momentum as compared to its previous uptrend. This may indicate that PANW’s share price has turned the corner and is ready to continue its rebound. I’ve identified the key areas to watch above on the charts. Ask questions below or in the Idea Chamber. Trade wisely.

Be certain to stop by the Idea Chamber and ask for an update on one of the stocks in your portfolio. Good luck trading!

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