Yesterday, we looked at a Daily Price Chart of Lululemon Athletica Inc., noting the stock has been making a series of higher highs and higher lows since mid–March.
Today’s chart is for Palo Alto Networks Inc. (NYSE: PANW).
Palo Alto Networks, Inc. provides security platform solutions worldwide. The company provides firewall appliances and software; Panorama, a security management solution for the control of appliances deployed on an end–customer’s network as a virtual or a physical appliance; and Virtual System Upgrades, which are available as extensions to the virtual system capacity that ships with physical appliances. It also offers subscription services covering the areas of threat prevention, uniform resource locator filtering, malware and persistent threat, laptop and mobile device protection, and firewall, as well as cyber–attack, threat intelligence, and content control.
Now, the Daily Price Chart below shows that PANW is in a price uptrend because the current price of PANW is trading higher than it was exactly three months ago.
The On Balance Volume (OBV) chart is shown below the Daily Price Chart.
Here’s what you need to know about the OBV Line: it measures how much volume is either pushing the stock up, or down. Meaning, the volume of stock that’s being sold or bought.
Using a stock’s volume in this way can confirm a downtrend by reflecting that more people are selling the stock than are buying it. Take a look at the chart below…
We can see from the OBV chart shown above that the On Balance Volume line for PANW is sloping up.
An up–sloping line indicates that the volume is heavier on up days and buying pressure is exceeding selling pressure.
Buying pressure must continue to exceed selling pressure in order to sustain a price uptrend.
The numerical value of the On Balance Volume line is not important. We simply want to see an up–sloping line to confirm a price up trend, which is displayed in the chart above.
We’ll be sure to keep following Palo Alto Networks Inc., as the stock’s buying pressure exceeds it’s selling pressure and the price uptrend continues.
Editor, Chart Of The Day