NTAP trade ideas
NTAP: Earnings Stock of the Day NetApp was one of the earliest companies in Cloud Technology. It had a stellar rise in price in 2018 but is now at risk of a topping formation. Data Storage is still a growth sub industry of the Cloud Industry. However, NTAP has gone beyond its fundamental values for 2019. Support levels are on the chart. Bounces should be expected around these price levels. This is an incomplete top. The stock could move sideways in a trading range rather than down. To sell short, the stock must break to the downside from here.
$NTAP - Kept on WL for 3 weeks just to post once I saw weakness Really just don't like this one at all. Don't like the chart, don't like the technicals, can't remember off top of my head if analyst upgraded the stock (which, is usually why I go over earnings if I'm not convinced), but the numbers were insulting. Hate trying to call a top that doesn't result in the most profitable time / target price, but so this is more of a rough draft reference. Hopefully the earnings analysis makes up for it
Key financial (bearish) factors :
- Net Income down -201% from 2016 ($76M vs. $229M)
- Net Income down -569% from 2017 ($76M vs. $509M)
- Comprehensive Income down 204% from 2017 ($35M vs. $511M) - this would explain the -34.49% decrease in equity from 2017
- $40M retained earnings in 2017 - now an accumulated deficit of ($118M)
- Debt-Equity ratio of .75
- ROA less than 1% (while goodwill & intangibles account for 25% of total assets)
- PE ratio of............... 228?
NTAP- H&S formation short from $61.07 to $50.23 & $55 Jun PutsNTRP seems breaking down forming a H&S formation. It has fair amount of insider selling & strong Twiggs money flow divergence. We think it will decline down to $50 area.
To play this we would consider $55 June puts, Which are $1.73
* Trade Criteria *
Date First Found- March 28, 2018
Pattern/Why- H&S formation short
Entry Criteria- Current price ($61.07)
Exit Criteria- 1st Target $52.23 & 2nd Target- $50.23
Stop Loss Criteria- $64.13
Indicator Notes- Twiggs money flow divergence
Special Note- Some insider selling. We would consider $55 June puts are $1.73
Please check back for Trade updates. (Note: Trade update is little delayed here.)
Technology stocks for 2018 #15 (NTAP)Look back in the time, February 2011 highs (red arrow)
And now in February 2018 the price is dealing again with a resistance zone in 60.00
But when the price is close to a resistance level: THE RULE SAY DO NOT BUY AT RESISTANCE
Then why I promote this buy long idea, if it will not work
There are something that the reader should know about my method:
There are rule based trading and (Discretionary) trading
I am not a trader, I am an end of day Analyst and stock picker and I pick stocks in a (Discretionary) way
this means that I have qualitative opinions and not quantitative rules
and when I pick stocks I do not use a screener like this
finviz.com
Continuing to the idea.
The haughty way the price reached the 60.00 level, tells me that the price reached that level to try to go higher
(red circle) looking a daily chart there are a overnight gap in the weekly looks like a big green candle
(red arrow) Long lower shadows, testing the support of the past gap
Gap + Long lower shadows= Bullish and resistance breakout
NTAP -Inverse fallen angel formation short from $55.85 to $51.63NTAP seems rolling over, forming an inverse fallen angel formation. We think it has good downside potential.
* Trade Criteria *
Date First Found- December 26, 2017
Pattern/Why- inverse fallen angel formation
Entry Target Criteria-Current price ($55.85)
Exit Target Criteria- 1st Target $51.63 2nd Target $47.57
Stop Loss Criteria- $59.37
Indicator Notes- Twiggs money flow divergence
Special Note- Good insider selling
Please check back for Trade updates. (Note: Trade update is little delayed here.)
Watch NTAP for Potential Upside MoveNo trade yet. Watching for a strong pop above recent small range on expanding volume.
If that occurs, enter long, with stop loss below recent low (yet to be determined as entry has not occurred yet. Target up in $45.50 region, or utilize ATR Stops trailing stop loss.
NTAP showing relative strength above important levelNetApp holds well above broken resistance level at $38. This is very important level as it is in play since March. We had some clues before break up as buyers managed to build series of higher lows with recent bottom at $36. Below this, idea will loose its luster.
As broad market entered into corrective phase, i like how this specifique stock showing us relative strength and wedging above important level. Sector of Data Storage devices also keeps its buying momentum ($WDC, $STX, $VMW).
Use your trade and risk management rules to keep odds on your side and control risk the same time. I am tier 1 here, add tier 2 if market will find its footing, add tier 3 on break og wedge. If it will go through $39, it will open doors to $41.
