CLOUDFLARE (NET) met expectations 2 days ago on my previous post and broke out from a Blue Sky Set-Up. It paused yesterday for profit taking and is currently set-up again to continue it's move to hit a round number target. Needham just raised its price target to 38, a mere 3% away from it's current price. NET is a clear beneficiary of the shift to work from home and e-commerce on increased demand for cybersecurity. The company provides an integrated cloud-based security solution to secure a range of combination of platforms, including public cloud, private cloud, on-premise, software-as-a-service applications, and Internet of Things (IoT) devices.
Current set-up is a slingshot which could potentially result to another Bullish Marobozu similar to the breakout candle. Possibilities are: (1) it pauses for another day (today) with low volatility or (2) continue its range expansion and hit 38-40. Pauses can extend to three days with tightening ranges and decreasing volume indicating a healthy profit taking before proceeding to make an explosive move which is otherwise referred to as a Boomer Set-Up. Best approach to prevent early participation if explosive breakout doesn't materialize is to buy at the break of the yesterdays high supported by volume acceleration. This can clearly observed and managed on the 15-minute chart.
Current set-up is a slingshot which could potentially result to another Bullish Marobozu similar to the breakout candle. Possibilities are: (1) it pauses for another day (today) with low volatility or (2) continue its range expansion and hit 38-40. Pauses can extend to three days with tightening ranges and decreasing volume indicating a healthy profit taking before proceeding to make an explosive move which is otherwise referred to as a Boomer Set-Up. Best approach to prevent early participation if explosive breakout doesn't materialize is to buy at the break of the yesterdays high supported by volume acceleration. This can clearly observed and managed on the 15-minute chart.
Comment:
Potential pullback due to break of minor trend line on the 2 hour chart with RSI divergence. Price may need to give way for healthy profit taking from its extended move with low volume before proceeding its move up.