NEW YORK (Real Money) -- It's a slow start today, so I wouldn't argue with traders or investors waiting to make positional moves. Earnings season is dying down, so we are going to move back to the influence of the macro scene: economic data, currency and any mergers that might hit the Street.
While the tech sector feels as though it has had a little more volatility and struggle this earnings season, F5 Networks (FFIV) appears to be setting up for a potential test of the 2014 highs, which would also put it within a stone's throw of all-time highs. The stock struggled at the beginning of the year, but has since filled a large gap.
The weekly chart breakout potential in price ties in precisely with the daily charts. I'd prefer to see a close this week above $127.50 to trigger a breakout higher from the current wedge pattern of the last six months. This chart seems to indicate long-term investors should be willing to give FFIV about $10 to the downside before stopping out. Or, for those who don't like playing breakouts, $10 lower is where they want to buy FFIV. Again, we see the moving averages pushing higher in a bullish fashion while momentum and trend favor the buyers.
I will note if the RSI and Vortex Indicator continue to push higher, but if price does not follow in the next few weeks, I would sit this one out and wait for a retracement in price to the lower support level of the wedge. Buying a very wide vortex indicator along with an overbought RSI has not been optimal recently. There is still plenty of upside on the RSI and MACD, but if price stalls over the next two to three weeks, I would focus on the lower support level of the wedge as I just mentioned.
Potential for a bounce at least to $135 is great, and potentially as high as $150. The chart looks great, but ask for just a little more before jumping in on the long side.
Editor's Note: This article was originally published at 11:31 a.m. EDT on Real Money on May 11.