Don't Ignore This Chart!

FireEye Battles Consolidation Support


FireEye reported earnings on Tuesday and surged on Wednesday morning with a strong open. The stock is trading well below the open now, but I wanted to highlight the bigger patterns at work. First, the long-term trend is up because the stock is above the 200-day EMA and the 50-day EMA is above the 200-day EMA. The stock forged an island reversal with two gaps in March and broke a big resistance zone with another gap in May. After a 50+ percent advance from mid March to mid May, the stock moved into a trading range from mid May to now. 

FireEye was clearly extended after the 50+ percent advance and entitled to a rest. The trading range is basically a consolidation, or rest, within an uptrend. Notice that the stock bounced off the 14.5 area in May, June and July to confirm support here. The indicator window shows a close-only chart to filter out the gaps and intraday price movements.  

Thanks for tuning in and have a great day!
--Arthur Hill CMT

Plan your Trade and Trade your Plan

Arthur Hill
About the author: , CMT, is the Chief Technical Strategist at Focusing predominantly on US equities and ETFs, his systematic approach of identifying trend, finding signals within the trend, and setting key price levels has made him an esteemed market technician. Arthur has written articles for numerous financial publications including Barrons and Stocks & Commodities Magazine. In addition to his Chartered Market Technician (CMT) designation, he holds an MBA from the Cass Business School at City University in London. Learn More
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