Don't Bottom Fish in Palo Alto Networks

Looking at the chart of Palo Alto Networks (PANW) this morning, I am reminded of that phrase about the weather in the month of March -- in like a lion and out like a lamb. Palo Alto Networks made a sharp gap to the downside at the beginning of March. It is now almost the end of the month and the price action is more lamb-like and timid. Let's look closer at the price action to see what April may bring for traders and investors.     In this daily bar chart of PANW, above, we can see a big gap to the downside in November and an even bigger downside gap at the beginning of March. PANW is below the declining 50-day moving average line and the declining 200-day moving average line. Prices are so far below these averages, they are of little use right now to technically oriented traders.   The On-Balance-Volume (OBV) line has moved up and down with the price action the past 12 months and reached new lows in the past four weeks. The momentum study is not showing a meaningful bullish divergence at this time. Can prices improve and rally without a bullish divergence? Sure, but the rally would probably take us by surprise.     In this weekly chart of PANW, above, we lose the price gaps but gain a longer-term perspective. In this weekly chart we can see a triple top pattern in 2015. Prices turn lower in 2016 and the slope of the 40-week moving average line turns down.   The weekly OBV line has moved sideways the past two years, which is surprising considering the downtrend. The weekly Moving Average Convergence Divergence (MACD) oscillator is below the zero line in an outright sell mode.       In this Point and Figure chart of PANW, above, the sharp downside gaps disappear. Notice that the $112 level has held twice and a breaking of that level could open up the possibility of a longer-term decline to the low $80s.   Bottom line: PANW could hold and rebase around current levels, but at this moment I am not getting enough technical clues to go with that forecast. This does not look like a stock to bottom-fish.
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