Palo Alto Networks Continues to Reward Investors: Here’s Where It Could Go Next

In his first “Executive Decision” segment of his Mad Money program Thursday evening, Jim Cramer spoke with Nikesh Arora, chairman and CEO of Palo Alto Networks (PANW) , the cybersecurity company.

Arora said that in today’s world, everyone is vulnerable, which is why it’s so important to be vigilant and prepared for attacks. Many hackers have gone from hobbyists to professionals, he said, and they’re targeting digital infrastructure, including services, software and frameworks.

There are also cyber threats from Russia that everyone needs to take seriously. If Russia attacks, they won’t be looking for ransom, they will be out for chaos and destruction.

Palo Alto Networks is constantly scanning its customers, looking for anomalies and using artificial intelligence to stop attacks as they occur, before damage can be done.

We looked at PANW just the other day on March 25 writing that “You have to be impressed when a stock shows independent strength. Traders should wait for a pullback closer to $575 before buying. Risk to $540.”

Let’s check the charts again.

In the updated daily bar chart of PANW, below, we can see that the shares have remained strong with a new high for the move up on Thursday. PANW remains above the rising 50-day moving average line and above, but not extended above, the rising 200-day line.

The On-Balance-Volume (OBV) line has been positive the past 12 months and confirms the price gains with aggressive buying. The Moving Average Convergence Divergence (MACD) oscillator is bullish.

In the weekly Japanese candlestick chart of PANW, below, we can see that the shares have remained strong with white (bullish) real bodies. A high wave candle pattern is showing for last week but this week’s candle (not plotted) should refresh the uptrend.

The weekly OBV line is close to making a new high for the move up and that will be a positive for the chart. The MACD oscillator crossed to the upside earlier this month for an outright buy signal.

In this daily Point and Figure chart of PANW, below, we can see a new high for the move up and a price target of $709.

In this weekly Point and Figure chart of PANW, below, we can see a longer-term potential target in the $852 area.

Bottom-line strategy: Traders should continue to hold longs in PANW but raise stops to $574 from $540. The $700-$709 area is our nearest price target.