Yesterday, PANW closed below its 200DMA for the 7th time since August's market correction. Prior to August, the last time the stock closed below its 200DMA was December 2013!! That speaks to just how significant a reversal in sentiment we've seen. That said, short interest has steadily declined. So while investors may not want to own the stock - it's expensive, trading at 14x sales, down from 16x, they certainly aren't willing to bet against it. Competitors, including Checkpoint and FireEye have reported weak guidance, which has weighed on the entire sector. PANW is the best of breed and will once again prove so with its next earnings report on November 23rd.
All that said, the technicals are falling apart and if the stock doesn't regain its 200DMA, both 150 and 140.40 (August's low) will be in play. I'd sit on side for another week and look to get long as the stock runs up into and especially, through earnings.
All that said, the technicals are falling apart and if the stock doesn't regain its 200DMA, both 150 and 140.40 (August's low) will be in play. I'd sit on side for another week and look to get long as the stock runs up into and especially, through earnings.
