Conclusion, Investment Implications, Strategy
Nutanix, Inc. (NTNX) is amid favorable conditions to resume its October 2020 Strategic advance. A sustained rise above the $33.90 area would target a 20% rise to $42.69. This is an Asbury Value trade idea.
Analysis and Rationale
Nutanix, Inc. (NTNX) provides an enterprise cloud platform in North America, Europe, the Asia Pacific, the Middle East, Latin America, and Africa. The company offers Acropolis converges virtualization, enterprise storage services, and networking visualization and security services; Acropolis Hypervisor, an enterprise-grade virtualization solution; Nutanix Karbon for automated deployment and management of Kubernetes clusters to simplify the provisioning, operations, and lifecycle management of cloud-native environments; and Nutanix Clusters solution. The company was incorporated in 2009 and is headquartered in San Jose, California.
The rightmost green highlights in Chart 1 below show that NTNX is currently rebounding from last week’s test of its 200-day moving average, a widely-watched major trend proxy currently situated at $33.60 (upper panel) while also rebounding from monthly (our Tactical time period) oversold extremes (lower panel). The other green highlights show that similar oversold extremes on Aug 19th and Jly 19th coincided with the resumption of NTNX’s larger Strategic advance. These conditions set up a low-risk opportunity to buy an uptrending stock in a potentially low-risk/high reward environment while situated just above major support.
Chart 1
Table 1 below shows that with an upside target of $42.69 and a protective stop placed below the $33.90 area, a long entry price of $35.70 would provide a 1:3.9 risk/reward ratio (risking $1.00 to make $3.90) with an initial risk of 5.0%.
Table 1
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