DailyPlay – Opening Trade (FTNT) – April 4, 2024

FTNT Bullish Opening Trade Signal

Investment Rationale

With major cybersecurity hacks seemingly occurring every week, cybersecurity as a sector remains an incredibly strong industry for investors. And as a leader in cybersecurity subscriptions and support, FTNT not only has a competitive edge but also exhibits strong fundamentals that align with its recent relative strength. 

Technical Analysis

After gapping lower nearly 3 quarters ago below its key $74 support level, FTNT has rallied back up to this important resistance and is potentially ready to break out higher. Recent volume near its $67 support level has been encouraging and providing me with more confidence that FTNT has the relative strength and momentum to break out above $74 back towards its $80 52-week highs. 

FTNT – Daily

Fundamental Analysis

FTNT currently trades at 40x forward earnings, which may seem high, but is on the lower end of its historical valuation. And we have to factor in the 22% EPS growth that analysts expect for this year and its incredibly strong financial position. With operating margins exceeding 23% and its low debt, FTNT is built for growth but has the balance sheet to whether any uncertainty.

Trade Details

Strategy Details

Strategy: Long Call Vertical Spread

Direction: Bullish Debit Spread

Details: Buy to Open 6 Contracts May 17th $70/$80 Call Vertical Spreads @ $3.64 Debit.

Total Risk: This trade has a max risk of $2,184 (6 Contracts x $364) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $364 to select the # contracts for your portfolio.

Trend Continuation Signal: This is a bullish trade on a stock that recently broke higher off a level of support.

1M/6M Trends: Bullish/Bullish

Relative Strength: 8/10

OptionsPlay Score: 108

Stop Loss: @ $1.82 Credit. (50% loss of premium paid)

View FTNT Trade

Entering the Trade

Use the following details to enter the trade on your trading platform. Please note that whenever there is a multi-leg option strategy, it should be entered as a single trade. 

Please note that these prices are based on Wednesday’s closing prices. Should the underlying move significantly during the pre-market hours, we will likely adjust the strikes and prices to reflect a more accurate trade entry. 

View FTNT Trade