NEW BULLISH Plays
NetApp, Inc. - NTAP - close: 34.67 change: +0.29
Stop Loss: 32.90
Target(s): To Be Determined
Current Gain/Loss: Unopened
Entry on October -- at $---.--
Listed on October 24, 2015
Time Frame: Exit PRIOR to earnings on November 18th
Average Daily Volume = 3.7 million
New Positions: Yes, see below
Technology stocks were getting a lot of headlines this past week thanks to some much better than expected earnings results. NTAP looks interesting because the stock has bottomed and appears to have reversed higher into a new up trend.
NTAP is in the data storage business. According to the company,
"Leading organizations worldwide count on NetApp for software, systems and services to manage and store their data. Customers value our teamwork, expertise, and passion for helping them succeed now and into the future."
NTAP is changing. They're transitioning from their older, legacy systems and investing in higher-growth areas. The new CEO, George Kurian, said,
"We're the only company that can help customers manage their data seamlessly across multiple cloud architectures and provide the scale needed to accommodate the exponential data growth generated by the digital world. This is what I see as our big opportunity."
His new focus seems to be working. NTAP's stock had been falling for months. Their fiscal Q3 and Q4 reports (announced in February 2015 and May 2015) were terrible. NTAP reported falling numbers and management lowered guidance both times. Kurian became the new CEO in June and his first quarter as the leader has born fruit.
NTAP's most recent earnings report was August 19th. It was the company's
fiscal Q1 announcement. Wall Street was expecting earnings of $0.23 a share on revenues of $1.32 billion. NTAP beat both estimates with a profit of $0.29 a share. Revenues were up +10% to $1.34 billion. Management raised their guidance significantly above analysts' estimates.
The stock popped but the broader market was in the middle of the late August correction lower. Shares of NTAP dropped again in late September when Goldman Sachs downgraded the stock. Fortunately NTAP found support near its August lows. Shares have built a bullish double bottom and reversed sharply higher. The point & figure chart has turned bullish and is now forecasting at $44.00 target.
Technically NTAP spent over a week consolidating sideways beneath resistance near $34.00. Now, in just the last few days, NTAP has rallied past resistance at $34.00 and its 200-dma.
Trigger @ $35.05
- Suggested Positions -
Buy NTAP stock @ $35.05
- (or for more adventurous traders, try this option) -
Buy the DEC $35 CALL (NTAP151218C35) current ask $1.57
option price is a current quote and not a suggested entry price.
Entry disclaimer: To avoid an unfavorable entry point, we will not launch a new play if the stock gaps open more than $1.00 past our suggested entry point.
Option Format: symbol-year-month-day-call-strike