Technology stocks have been strong over past couple of weeks, offering the kind of leadership that can certainly take the entire market higher. We have noted recent solid performances from Intel, Apple, Amazon and Facebook – just to name a few. Yet, some areas such as software and cloud services have been showing mixed results. We found RedHat to be among one of those names, a survivor from the past of the ‘go-go dotcom’ era that has lived on and evolved into a nicely profitable company within a strong niche.
The chart of RedHat shows a stock mired in a range since the ‘Brexit’ (end of June), but it may have burst out ready to move toward higher ground. Monday’s surge was on higher turnover and we see a breakout on relative strength, an indicator we have been watching closely. Resistance is ahead but we believe a good earnings report will push this stock higher up towards the 80 level.
Watch the video analysis here.
