Netapp made a couple bullish trend line breaks; target 57
On October 14, options traders bought a bunch of November puts on Netapp, apparently betting that the stock would get rejected from the trend line it was testing and fall further toward the high-volume support node around 40.50. Instead, Netapp successfully made two bullish trend line crosses. There's quite a bit of upside potential here. It should at least test 57. Possibly it will gap fill to 57.45, in which case the next target is about 62.50. In the most optimistic scenario, it could test the next trend line, maybe around 66.50 early next year.
The average analyst price target is slightly below the current price, which could be a drag on the stock. Cloud services like Netapp have been weak this earnings season, and Netapp next reports earnings on November 13. I'd tend to expect the stock to be bearish going into earnings.
However, analyst ratings on Netapp have been improving, and it's currently got a 6.9/10 summary score from Thompson-Reuters. Netapp also has an attractive P/E under 14 and forward P/E under 13. It's rated highly undervalued by S&P Capital IQ. If analyst firms raise their price targets after this trend line break, that could be an upward catalyst for the stock.
The average analyst price target is slightly below the current price, which could be a drag on the stock. Cloud services like Netapp have been weak this earnings season, and Netapp next reports earnings on November 13. I'd tend to expect the stock to be bearish going into earnings.
However, analyst ratings on Netapp have been improving, and it's currently got a 6.9/10 summary score from Thompson-Reuters. Netapp also has an attractive P/E under 14 and forward P/E under 13. It's rated highly undervalued by S&P Capital IQ. If analyst firms raise their price targets after this trend line break, that could be an upward catalyst for the stock.
Comment:
P.S. I'd wait for it to close above 55 before entering, because 55 has been acting as a resistance yesterday and today. We might get a small pullback before breaking above 55.
