Shares of Fortinet (FTNT) have been in a sideways trading range and a rectangle pattern has emerged.
FTNT is a cybersecurity vendor that sells products, support, and services to small and midsize businesses, enterprises, and government entities. The company is benefiting from rising demand in security and networking products due to the coronavirus forcing the workforce to work remotely. It is also benefiting from strong growth in its Fortinet Security Fabric, cloud and SD-WAN offerings.
Take a look at the 1-year chart of FTNT below with added notations:
After trending lower from its July peak, FTNT has fallen into a relatively tight, sideways trading range. While in the range, the stock has formed a resistance level at $120 (red), and a level of support at $112.5 (green), thus creating a rectangle pattern.
At some point, the stock will have to either break the $120 resistance or the $112.5 support. The possible long position in the stock would be on a breakout above $120. The ideal short opportunity would be on a break below $112.50.
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FTNT shares were trading at $116.40 per share on Friday morning, up $0.90 (+0.78%). Year-to-date, FTNT has gained 9.03%, versus a 2.26% rise in the benchmark S&P 500 index during the same period.
About the Author: christian
Christian is an expert stock market coach at the Adam Mesh Trading Group who has mentored more than 4,000 traders and investors. He is a professional technical analyst that is a certified Chartered Market Technician (CMT), which is a designation awarded by the CMT Association. Christian is also the author of the daily online newsletter Todays Big Stock. More...
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