The stock market was hit with hard selling pressure last week, but Palo Alto Networks (PANW) held up rather well and move below its breakout zone. Stocks that hold up best during a broad market correction are often the ones that lead on the rebound.
The chart shows PANW in a clear uptrend with the 50-day EMA above the 200-day EMA. Both EMAs are also rising. PANW also recorded a 52-week high in late January and remains just a few percent below this high.
The broken resistance zone in the 151-153 area turns first support and this is the first area to watch for a bounce. It is possible that a small bull flag is forming over the last two weeks (blue lines). Watch for a breakout at 160 to signal a continuation higher.
Plan Your Trade and Trade Your Plan.
- Arthur Hill, CMT
Senior Technical Analyst, StockCharts.com