Here’s how to tackle the Palo Alto networks as they climb

Palo Alto Networks (PANW) held up extremely well and reached new highs, despite weak overall market averages. We watched PANW on February 23.

In this daily bar chart from PANW, below, we can see that prices spiked in late February and then corrected in mid-March before further gains. Trading volume was strong at the end of February and did not increase much during the recent rally to new highs. The daily On-Balance-Volume (OBV) line rose last year to confirm the price action. The slopes of the average straight lines over 50 and 200 days are positive. The MACD (Moving Average Convergence Divergence) oscillator is bullish.

In this weekly Japanese candlestick chart from PANW, below, we see a bullish picture. Prices made new highs with no upper shadow in the most recent candle. Prices are firmly above the rising 40-week moving average. The weekly OBV line is showing a long upside, so I’m not worried that the line hasn’t yet reached a new high to confirm the price action. The MACD oscillator has just moved upwards for a new outright buy signal.

In this daily dot-and-digit chart from PANW, below, we can see an upward price target of $844.

In this weekly Point and Figure chart, we can see an upward price target of $852.

Basic strategy: You must be impressed when a title shows independent strength. Traders should wait for a pullback closer to $575 before buying. Risk at $540.