FEYE Stock: Waiting for a Trigger
FireEye Stock I am getting excited about the prospects of FireEye Inc (NASDAQ:FEYE) stock because I have the inclination to believe that the investment is setting up to stage a bullish advance. This view is a drastic change to what FEYE stock investors have been used to because a bear market has ravaged the share price in recent years. This bullish view on FireEye stock is a result of a number of indications on the company’s stock chart that are now suggesting that a bull market is in development.
I outlined many of these indicators on June 20 of this year, in a publication titled “FireEye Stock Is All Set to Build Upon This Year’s Gains.” These indicators that I focused on remain in bullish alignment, which continues to suggest that an advance is set to take place. I am updating that publication because new indications were generated, reinforcing this bullish view. These new indications are adding fuel to the bullish fire by suggesting that this move to the upside is possibly only moments away from initiating.
In September 2015, a bearish indication was generated when the 50-day moving average crossed below the 200-day moving average. This crossing of the moving averages is called a “death cross” and it is highlighted on the stock chart. This bearish indication suggests that a bear market was in development, and therefore lower stock prices were expected to follow. FEYE stock proceeded to drop from a price of $32.00 to a low of $10.35, losing 67.97% before the stock price was finally able to find its footing. This example reinforces the notion that that a death cross should never be ignored.
In May of this year, a golden cross was generated when the 50-day moving average crossed above the 200-day moving averages. This indication put the bearish implications suggested by the death cross to bed, and it is now suggesting that a new bull market is in development. As a result, higher stock prices are now expected to follow.
The following FireEye stock chart illustrates the trigger that will suggest another stock price advance is underway.
Chart courtesy of StockCharts.com
This FEYE stock chart is highlighted to specifically pinpoint the alternating wave structure that is essential in creating a bullish trend. These alternating waves consist of impulse waves, which are highlighted in green, and consolidation waves, which are highlighted in purple.
Impulse waves define the stage in a bullish trend where a stock stages a price advance. Consolidation waves define the stage in a bullish trend where overbought conditions are alleviated as the stock price corrects. The unwinding of an overbought condition creates the necessary environment so a new impulse wave can develop. This results in a wave structure where the waves feed off each other, creating a sustainable and orderly trend.