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Cloud Stocks Report: Profits In The Sky

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October 31, 2011 – Comments (0) | RELATED TICKERS: RAX , FFIV , RVBD

Since October 4, 2011 the major stock market indexes have soared sharply higher. This October rally has been one for the record books. Obviously, short covering from the European bailout news has helped this stock market trade higher over the past four weeks. The leading technology stocks have benefited greatly from this stock market surge. This week we shall look at three leading stocks in the cloud computing sector that have soared to overbought levels. As we all know, overbought stocks can certainly remain overbought for extended time periods. However, in this report we will reveal the levels where pullbacks are likely to occur, and trading opportunities will be presented.

F5 Networks Inc (NASDAQ:FFIV) is a leading computer networking company that uses cloud technology. This stock has soared sharply higher since October 4, 2011 when the stock traded as low as $70.21 a share. Last week, the FFIV stock closed at $107.63 a share. It is safe to say that this tech leader is very extended and overbought at this time. The stock is coming into an important gap window resistance around the $110.00 area. The next major resistance areas will be around the $112.25, $117.00, and $122.50 levels. Should this stock pullback and consolidate before moving higher traders should watch for near term support around the $98.50, $93.40, and $89.00 levels. Take these levels, place them on your charts and look for the stock to react at each level.


Riverbed Technology Inc (NASDAQ:RVBD) is another leading networking and cloud computing stock. On October 4, 2011 the stock was trading as low as $18.33 a share. Last week, the stock closed at $29.04 a share. This stock is extremely overbought and extended at the moment. Therefore, a pullback or consolidation can occur at any time now. Should RVBD stock trade higher from its current price traders should watch for important resistance around the $29.25, $33.00, and $35.50 levels. If the stock does pullback from its current level traders should watch for near term support around the $26.40, $25.00, and $23.50 levels.

 
Rackspace Hosting Inc (NYSE:RAX) is a leading internet hosting company that utilizes the leading cloud technology. This stock traded as low as $30.34 a share on October 4, 2011. Since that time the stock has surged higher, closing at $42.47 a share on October 28, 2011. What a rally! The stock broke out of a sloppy one week base on October 26, 2011. Traders should watch for near term resistance around the $45.75, $48.00, 52.00, and $56.25 levels. Should the stock pullback from current levels there will be near term support around the $39.50, $37.90, and $36.40 areas.

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