To The Moon

Cybersecurity stocks have been the craze in the past few weeks. We have fears over security and safety owing to the discovery of surveillance balloons across the US and around the world. Moreover, cybersecurity companies have been posting strong ER beats across the board. Having lost all my charts previously, I lost my charting on Palo Alto Networks (PANW). However, I decided to re-chart the stock again with a fresh perspective on the stock. PANW is interesting because if you just zoom out and look at the stock, it appears to be trading in a massive distribution pattern that is likely going to end with it trading near the 100s. However, the market makers never make things easy for retail traders or investors betting against the stock. Here’s a look at the stock’s daily chart: It appears that cybersecurity stocks are putting in inverse head and shoulders bottoming patterns, even if bears are calling for a further drop on the stock. Removing all my support/resistance lines, it appears that we have a left inverse shoulder around the 140-170 area (massive range), a head around the 132 area, and a yet-to-be-formed right inverse shoulder. This pattern is supported by the 192 resistance that the stock failed to clear even after a comprehensive ER beat. This is the setup that I’m looking to play! You can see the inverse head and shoulders pattern more clearly on the weekly chart: A closer look at the stock shows that it is still trading in an uptrending broadening wedge pattern: For confirmation of the formation of a right shoulder, ideally I would want to see the stock break below the broadening wedge pattern and start trading in a nice descending channel (similar to BABA - refer to my last post on it). Currently, there is a bearish divergence (HH on stock, HL on 14-day RSI) forming on the stock, alongside a small hidden bullish divergence (HL on stock, LL on 14-day RSI) which could suggest that the stock may try to push towards 192 again before failing and breaking down. However, given the size of the bearish divergence, I favour that setup more than the hidden bullish divergence, which could play out and be a massive rejection. To add to the bearish thesis, there has been insider selling on 28th February by the CEO and yesterday by the Chief Accounting Officer (CAO). They sold at the 186-187 area as part of a “pre-agreed” trading plan, but I do think it is a sign that they anticipate a drop in the stock in the next few weeks or so. I have added some puts and I’m looking for a move down in the coming weeks. I’m not bearish on the sector, but I feel that some of the “hype” will be sold into and we might see a similar move as that of Cloudflare (NET) soon. Good luck everyone! If you enjoyed this post, then leave a like and/or a comment on my post and follow me for more of such posts! @TigerWire @CaptainTiger @TigerStars @小虎活动 @MillionaireTiger $Palo Alto Networks(PANW)$ $CrowdStrike Holdings, Inc.(CRWD)$ $Fortinet(FTNT)$ $Cloudflare, Inc.(NET)$ $SPDR S&P 500 ETF Trust(SPY)$ $Apple(AAPL)$