Rick Pendergraft's Avatar
Rick Pendergraft
published in Blogs
Sep 10, 2019
Upward trend holds for Palo Alto Networks after earnings

Upward trend holds for Palo Alto Networks after earnings

Santa Clara-based Palo Alto Networks (NYSE: PANW) reported earnings on September 4. The software security firm beat both earnings and revenue estimates for the fiscal fourth quarter, but the forward guidance was a little below analysts’ estimates. The overall reaction from investors was a positive one as the stock jumped when it opened for trading on September 5.

Looking at the weekly chart for Palo Alto, we see that the stock was trading just above its 104-week (two years of data) moving average and just above a trend line that connects the lows from the last three years. The bounce after the earnings report allowed the two support levels to remain in place as the stock moved back above its 52-week moving average.

The weekly overbought/oversold indicators had dropped down in the four weeks heading in to the earnings report, but they hadn’t reached oversold territory. Over the last three and a half years, the 10-week RSI has only been in oversold territory on two occasions. The weekly stochastic readings have been there five times in the same time period.

Tickeron’s Technical Analysis overview shows several additional bullish signs for Palo Alto and those indications are based on the daily indicators. The stochastic indicators made a bullish crossover and that suggests the stock may be in a reversal from a downtrend to an uptrend. In 38 of 50 cases where Palo Alto's stochastic indicator exited the oversold zone resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued uptrend are 76%.

Following a 3-day advance, the price is estimated to grow further. Considering data from situations where Palo Alto advanced for three days, in 261 of 356 cases, the price rose further within the following month. The odds of a continued uptrend are 73%.

The RSI Indicator points to a transition from a downtrend to an uptrend -- in cases where Palo Alto's RSI indicator exited the oversold zone, 10 of 14 resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued Uptrend are 71%.

Fundamentally, the company has performed extremely well over the last few years. Earnings have grown by a rate of 46% annually over the last three years and they were up by 10% in the fourth quarter. Sales increased by 22% in the fourth quarter and have increased by an average of 28% per year over the last three years.

In addition to the strong earnings and sales growth, the company’s management efficiency measurements are well above average as well. The company boasts a return on equity of 42.3% and the profit margin is at 23.1%.

Sentiment toward Palo Alto is mixed at this time. Analysts are pretty bullish on the stock with 30 out of 35 analysts rating the stock as a “buy”. There are four “hold” ratings and one “sell” rating. This puts the buy percentage at 85.7% and that is well above average.

The short interest ratio is at 4.3 currently and that is slightly above average. I wrote about Palo Alto back in November ahead of another earnings report and the short interest ratio back then was at 2.8. This means that pessimism toward the stock is higher than the average stock and investors have been getting more bearish over the last nine months.

The put/call ratio for Palo Alto was at 1.35 ahead of the earnings report and that is higher than the average stock and is indicative of pessimism. There were 42,170 puts open at the time and 31,241 calls open.

With the combination of solid fundamentals, an upward trend on the stock, and an overall bearish sentiment from short sellers and option traders, Palo Alto looks poised to continue its upward trend.

Related Tickers: PANW
Related Portfolios: Balanced portfolio - High Tech & REITs
Sergey Savastiouk's Avatar
Sergey Savastiouk
published in Blogs
Mar 07, 2021
4 Tricks Hedge Funds Use to Get Ahead

4 Tricks Hedge Funds Use to Get Ahead

If the stock market were Major League Baseball, hedge funds and institutional investors would be the pros on championship teams while everyday self-directed investors (SDIs) are the benchwarmers in the minors.It’s how they get ahead, and it’s why 90% of SDIs lose money trying to play (invest and trade) in the major leagues. The 4 tricks we discuss below are rooted in one common theme: they all use Artificial Intelligence and algorithms to generate data and ideas.
John Jacques's Avatar
John Jacques
published in Blogs
Mar 22, 2018
A.I. Stock Market Predictions: Head & Shoulders

A.I. Stock Market Predictions: Head & Shoulders

Statistics for the Head-and-Shoulders Bottom Pattern The days where only hedge funds used algorithms to trade stocks are officially over. Now retail investors can use Artificial Intelligence (A.I.  Here’s an example of the algorithm in action: Late last year, Tickeron’s A.I.
Sergey Savastiouk's Avatar
Sergey Savastiouk
published in Blogs
Jul 10, 2020
3 Stocks to Buy if Coronavirus Second Wave Hits

3 Stocks to Buy if Coronavirus Second Wave Hits

By analyzing market trends from the first wave, you can predict behavior for the second. Technology stocks have performed at historic levels this year, but the market is severely overbought.To compensate for that, look at performance during Q1 and Q2, the height of global Covid shutdowns.
Edward Flores's Avatar
Edward Flores
published in Blogs
Feb 06, 2021
How to Become the Millionaire Next Door

How to Become the Millionaire Next Door

The Golden Gate Bridge is always a fixture of these walks too, one of man's most beautiful creations.  As we were walking, at one point she turned to me and said, "Man, I'll never have a million dollars."" My girlfriend is 27 years old and works as a graphic designer, making about $75,000 a year.
Alla Petriaieva's Avatar
Alla Petriaieva
published in Blogs
Feb 23, 2021
Is Ethereum’s Bomb about to Explode?

Is Ethereum’s Bomb about to Explode?

Ethereum’s software is set for an update in October.Until it is finished, participants in the Ethereum blockchain must determine how to delay the difficulty bomb – code that necessitates a steadily increasing amount of computer power to mine blocks and unlock rewards – that is already in place.
Sergey Savastiouk's Avatar
Sergey Savastiouk
published in Blogs
Aug 07, 2018
When Is the Next Recession Coming?

When Is the Next Recession Coming?

However, we also know that economists predicted 22 recessions out of 11 that took place since 1945. Are there real recession signs we should watch for?Indeed, the answer is yes, and here are a few very important ones: The first one is almost obvious and known to everyone – it is the Fed.
Abhoy Sarkar's Avatar
Abhoy Sarkar
published in Blogs
May 22, 2020
Central banks have been buying $2.4 billion in assets every hour for the past two months

Central banks have been buying $2.4 billion in assets every hour for the past two months

Some $17.8 billion has been poured into  bond markets over the past week, the biggest move in more than three months.Around $3.5 billion has been invested into gold, the second largest on record. 
Rick Pendergraft's Avatar
Rick Pendergraft
published in Blogs
Feb 07, 2021
Mid-January Short Interest Report Shows 8 Stocks with Good Fundamentals and High Short Interest
Sergey Savastiouk's Avatar
Sergey Savastiouk
published in Blogs
Mar 10, 2021
How to Start Trading Penny Stocks

How to Start Trading Penny Stocks

Penny stocks have long been marginalized within the professional investment community, oftentimes being painted with a broad brush of simply being “too risky.” Leonardo DiCaprio’s depiction of the penny stock peddling conman, Jordan Belfort, in the Wolf of Wall Street certainly didn’t help.Here are four reasons to start trading them now. Reason #1: Let’s State the Obvious -- Penny Stocks are Cheap A single share of Apple Inc. costs over $350.
Abhoy Sarkar's Avatar
Abhoy Sarkar
published in Blogs
May 08, 2020
US unemployment rate jumps to 14.7%, the highest in series history

US unemployment rate jumps to 14.7%, the highest in series history

The U.S. economy’s employment fell by -20.5 million in April. The coronavirus crisis led to unemployment rate soaring to 14.7% in the U.S, the highest rate in the Bureau of Labor Statistics-tracked series history that goes back to 1948. However, the figures were better compared to several economists'/analysts' forecasts of 22 million job losses and 16% unemployment rate.  Another unemployment measure that includes those who have stopped looking for work as well as those holding part-time jobs for economic reasons also touched an all-time high of 22.8%.