Based on good technical signals, CLOUDFLARE INC - CLASS A is potentially setting up for a breakout.

Our stock screener has identified CLOUDFLARE INC - CLASS A (NYSE:NET) as a potential breakout candidate. This technical breakout setup pattern occurs when the stock consolidates after a strong uptrend. While the actual breakout is uncertain, it may be worth keeping an eye on NYSE:NET.

What is the technical picture of NYSE:NET telling us.

ChartMill assigns a Technical Rating to every stock. This score ranges from 0 to 10 and is updated daily. The score is determined by evaluating multiple technical indicators and properties.

We assign a technical rating of 9 out of 10 to NET. This is due to a consistent performance in both the short and longer term time frames. Also compared to the overall market, NET is showing a nice and steady performance.

• The long term trend is positive and the short term trend is neutral. The long term trend gets the benefit of the doubt for now.
• Looking at the yearly performance, NET did better than 91% of all other stocks.
• NET is one of the better performing stocks in the IT Services industry, it outperforms 82% of 87 stocks in the same industry.
• NET is currently trading in the upper part of its 52 week range. The S&P500 Index however is currently trading near a new high, so NET is lagging the market slightly.
• In the last month NET has a been trading in the 74.37 - 87.17 range, which is quite wide. It is currently trading in the middle of this range, so some resistance may be found above.

Check the latest full technical report of NET for a complete technical analysis.

How do we evaluate the setup for NYSE:NET?

Besides the Technical Rating, ChartMill assigns a Setup Rating to every stock to determine the degree of consolidation. This rating, ranging from 0 to 10, is updated daily and evaluates various short-term technical indicators. NYSE:NET currently holds a 9 as its setup rating, suggesting a particular level of consolidation in the stock.

Besides having an excellent technical rating, NET also presents a decent setup pattern. We see reduced volatility while prices have been consolidating in the most recent period. There is a resistance zone just above the current price starting at 85.05. Right above this resistance zone may be a good entry point. There is a support zone below the current price at 81.64, a Stop Loss order could be placed below this zone. Very recently a Pocket Pivot signal was observed. This is another positive sign.

Trading setups like NYSE:NET

One strategy to consider is waiting for the actual breakout to occur, where the stock breaks out above the current consolidation zone. Traders can then enter a buy position, anticipating further upward momentum. As a risk management measure, it is advisable to set a stop loss order below the consolidation zone.

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents technical observations generated by automated analysis but does not guarantee any trading outcomes. Always trade responsibly and make independent judgments.

Every day, new breakout setups can be found on ChartMill in our Breakout screener.

Keep in mind

This article should in no way be interpreted as advice in any way. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.