Stock Pick: Chart Triggers Buy Signal For Splunk

Splunk is one of those highly volatile names that when it trends it can provide some great profit opportunities.  As we see from the chart this stock has created a wide range over just the past few months.  The gap lower in February seemed devastating but Splunk got its energy back following a strong earnings report a few weeks later.  That move left a big gap in the chart and the following weeks saw this stock making higher higher highs, higher lows in a straight line (not much volatility - see the big arrow). 

Recently Splunk pulled back to support and put in a higher low on the chart, and now we see the stock trading above the 200 moving average for the first time in many months.  The MACD is now on a buy signal and while we see an overbought condition, we should see the stock trade back to the 50 moving average, which would be a good stop to add the position.  Volume trends have been very strong and positive.

 

Watch the video here.

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