Palo Alto Networks
Not all of the names we're looking at today are bullish; the sole downside trade is $5 billion network security firm Palo Alto Networks (PANW). Make no mistake, PANW has seen a stellar run over the last six months, rallying more than 50% while the broad market was barely breaking double-digits. But that buying frenzy is exactly what's making PANW look "toppy" this week.
Palo Alto Networks is currently forming a double top, a bearish reversal pattern that sounds just like it looks. The double top is formed by a pair of swing highs that max out at approximately the same price level. The sell signal comes when the trough that separates the two highs gets violated. For PANW, that trough is right at $68.50, a price that's getting tested this morning.Momentum, measured by 14-day RSI, adds some extra confidence to downside in PANW. Despite both price tops coming in at the same level, our momentum gauge has been bleeding off over the course of the setup. That signals the fact that down days are outpacing up days in this stock. Keep an eye on that $68.50 level in today's session. If it gets violated, PANW is a sell. To see this week's trades in action, check out the Technical Setups for the Week portfolio on Stockpickr. -- Written by Jonas Elmerraji in Baltimore.
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