Halo Lift Has FireEye, Inc. (FEYE) Soaring

FireEye Inc (FEYE) is now up 30% in 2015

Apr 8, 2015 at 10:39 AM
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FireEye Inc (NASDAQ:FEYE) is adding to its 2015 gains today, with the stock's 3% advance to trade at $41.15 putting its year-to-date lead at 30%. Also, to the dismay of skeptics both in and out of the options arena, the shares are now on pace to close above their 10- and 20-day moving averages for the first time since early March -- trendlines that acted as support at the beginning of the year.

Daily chart of FEYE in 2015 with 10-Day and 20-Day Moving Averages

Even with FEYE's technical power, many analysts maintain a skeptical view. Specifically, 10 of 21 brokerage firms covering the stock rate it a "hold" or worse. What's more, the equity is knocking on the door of its average 12-month price target of $43.35.

Options traders, too, have shown signs of pessimism toward FEYE. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the security has amassed a 10-day put/call volume ratio of 0.47 -- a reading in the 76th percentile of its annual range. Said differently, options traders have been buying to open puts over calls at an accelerated rate.

FireEye Inc's (NASDAQ:FEYE) gains today can be attributed in part to a deal reported last night in which Singapore Telecom agreed to purchase a majority of U.S. cybersecurity company Trustwave. As a result, cybersecurity stocks across the board -- including FEYE -- are benefitting. If FEYE continues to trek higher, a capitulation among skeptics could add fuel to the equity's fire.

 

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