:max_bytes(150000):strip_icc()/FTNTChart-caf388b2182e4f0996f94ffd04b9c020.jpg "Watch these Fortinet stock price levels as it moves higher after the earnings announcement")
The central theses
- Fortinet shares jumped in premarket trading on Wednesday after the cybersecurity solutions provider raised its full-year revenue forecast as enterprise customers increase spending to protect their data and applications from cyberattacks.
- The company’s better-than-expected earnings report is likely to create a bullish gap in the chart, which could lead to a longer-term upturn.
- A post-earnings rally could see Fortinet shares test key chart levels including $62.50, $69 and $73.50.
Fortinet (FTNT) shares jumped in premarket trading on Wednesday after the cybersecurity solutions provider raised its full-year revenue forecast as enterprise customers increase spending to protect their data and applications from cyberattacks.
The company’s better-than-expected quarterly results follow two recent acquisitions. Fortinet is looking to expand its product offerings as its customers shift their IT operations from on-premises networks to cloud-based platforms. Last week, the cybersecurity giant announced it had completed the acquisition of cloud-native application protection platform Lacework. On Tuesday, it announced it had bought Next DLP, a company specializing in insider risk and cloud data protection.
Fortinet shares rose 15% to $64.18 about two hours before the market opened on Wednesday.
Below, we’ll take a closer look at the Fortinet chart and use technical analysis to point out key price levels to watch out for.
Gains will reverse pessimistic technical developments
Since hitting a record high in July last year, Fortinet shares have remained essentially range-bound, allowing traders to see significant fluctuations on both sides of the market.
Recently, in late June, the 50-day moving average (MA) crossed below the 200-day MA, forming a bearish death cross signal, with the price continuing to trend downward ahead of the company’s quarterly earnings release.
However, Fortinet’s optimistic earnings report is likely to create a bullish gap in the chart, which could lead to a longer-term upturn.
Watch these price levels for further uptrend
Looking ahead, investors should keep an eye on three key price levels that Fortinet stock could test during a post-earnings rally.
The first is around $62.50, a point on the chart where the price could face resistance from above, originating from a trend line connecting several key peaks during the sideways trading period between February 2023 and May of this year.
Further buying could lead to a move to the $69 level, where shares could face selling pressure near the April 2023 swing high, which also aligns with a series of similar price points over an 11-month period from May last year to April this year.
The last level to watch is $73.50, where the price could face resistance near a trend line connecting the mid-June 2023 high to a triple top pattern that formed on the chart between February and April.
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