Squeeze and Bull Pennant in NET

Quick look at possible moves. NET has not been a really happy camper for a while, but had a nice gap up with earnings in early February but with a slow decline since. While relatively flat, there still is a hint at a Bull pennant or flag. It has for a while been developing a squeeze.

If you look at a weekly chart, there is also a pennant formation.

Next earnings is in less than a month, given the building volatility going into earnings and the chart findings, this is a reasonable candidate for a bullish move. Personally, have a Put Credit Spread limit order in place. Will follow reaction and response. This is NOT a recommendation but a comment.

Thoughts or comments?

Happy hunting,
Lakedog

1 Like

Yes, I like Cloudflare’s prospects and this seems like a nice setup up after the huge gap up last earnings report. (Weekly chart below). What I think makes it nice is the continuing decline in volume since earnings day. We are running out of buyers and sellers and something has to give. Perhaps CPI will give someone conviction. Another nice aspect is the consolidation is along moving averages (4-week in green, 10-wek in red). IBD would say a good volume move off that support is an early-buy opportunity as it builds the right side of the base. I have a long position in my MF portfolio, but no trading position at this time.

image