NEW YORK (Real Money) -- A convertible note offering that reads like microwave cooking instructions from the late 1980s has FireEye (FEYE) seeing red today, but this looks like an opportunity or, at the very least, a setup on the bullish side of the coin.
FireEye has been trading in a fairly wide range since its mid-February breakout. The range encompasses the entirety of the breakout, which is a little odd, but I view this as one big retest of that push higher. The range has been tightening a bit, which is a plus for expectations of volatility. Then again, that is a double-edged sword. You don't want to be on the wrong side of volatility. Just ask anyone long Workday (WDAY) or short Michael Kors (KORS) puts today.
Today's drop in price for FireEye has the daily chart forming a small bull flag after the push off of $40. We are doing this right at the top of the Bollinger band, which could set up the stock for a small slingshot higher on any move over $45.25. Buyers right now would need to be a little patient and willing to keep a tight stop around $43.75, maybe as low as $43.50. Momentum and trend are favorable, so I wouldn't be in a hurry to short FireEye on this news today or even under $43.75.