Stephen, have been following CHKP - shows how hard things can be to predict. I was surprised by the strength it showed Friday - finishing in the green on an historically down tape. I agree with you that it "should" have collapsed (or should still collapse) just like every other high PE Nasdaq stock, and it sure seemed like it was going to do so a few days ago: Its daily chart looked completely hopeless, a big red dagger thrusting psychotically through critical support, but, instead of rolling over and dying, the stock re-mounted and held price support around 64. If you look at its daily chart over the last year, it seems to get very excited around that level up and down. The weekly chart just put in a hammer - potential bottom reversal - and suggests that the April-June congestion band in the high 50s might offer meaningful secondary support on the next level down.
For short trades right now, I'm looking more to stocks that seem to be behaving more predictably. (Now that I've said that, don't be surprised if it's cut in half by Wednesday.) Altogether, I wouldn't feel comfortable getting short on CHKP for more than a scalp until after it broke down again. It's still locked in a downtrend, but I consider it a stronger candidate for a long trade on any bounce in the larger market. Earlier in the year it seemed to have trouble getting through the upper 60s (pre-split 120s?), but - again, conditioned on a decent rally in the techs that I'm not counting on - a short-term target in the mid-70s or even 80 wouldn't be completely unrealistic. |
