FEYE Gets Big Upgrade. What Now?

We can make the case that FireEye, Inc. (FEYE) has been carving out a huge base formation for the past 15 months, in the aftermath of a three-year bear phase off of its all-time high at 97.35.

That said, FEYE still has plenty of work to do prior to completing the base. For starters, the price structure needs to claw its way above heavy resistance lodged between 12.90 and 13.60, which if accomplished, will point towards a run at 16.00 - 17.00, as the base approaches completion-- and upside potential eventually to 24.00 - 26.00.

From a near-term perspective, today's upgrade by The Goldman Sachs Group, Inc. (GS) to Buy from Sell, with a target of 15 (from 10), has left behind a substantial up-gap from 11.49 to 12.28.

Given the extremely heavy resistance lodged above 12.90, my sense is to give FEYE some time to back and fill some, if not all, of the gap prior to entering a new long position for our Model Portfolio.

Key, near-term support resides around 11.00, which must contain any forthcoming acute weakness after filling the gap (11.49).

For now, FEYE looks extremely promising, but as is usually my style, I have no desire to chase this morning’s Goldman inspired strength... Last is 12.42/43