FireEye Inc. (Friday’s close US$19.76) traded in a horizontal trading range mostly between US$10 and US$20 for about five years (dashed lines). Last December the stock had a major breakout from this range and rose to US$25.53, which signalled the start of a new up-trend toward higher targets (A).
The recent decline toward the top of its trading range and towards its 40-week Moving Average (40wMA) provides an excellent entry point. Only a sustained decline below US$18.50-US$19.00 would be negative.
Behaviour indicators including the rising 40wMA and the rising trend-line (solid line) confirm the bullish status.
A sustained rise above US$23 would suggest the resumption of the up-trend and signal Point & Figure targets of US$26 and US$28. The large trading range (dashed lines) supports higher targets.
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Monica Rizk is the senior Technical Analyst and Ron Meisels is the president of Phases & Cycles Inc. (www.phases-cycles.com). And he tweets at @Ronsbriefs. They may hold shares in companies profiled.
Chart source: www.decisionplus.com
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